Edgar Filing: ANGLOGOLD ASHANTI LTD

Page 1

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

Report on Form 6-K dated March 29, 2018

Commission File Number 1-14846

AngloGold Ashanti Limited

(Name of registrant)

76 Rahima Moosa Street

Newtown, 2001

(P.O. Box 62117, Marshalltown, 2107)

South Africa

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form
20-F or Form 40-F.

Form 20-F X

Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(1):

Yes

No X

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(7):

Yes

No X

Indicate by check mark whether the registrant by furnishing the information contained in this Form
is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.

Yes

No X

Enclosure: Press release

ANGLOGOLD ASHANTI LIMITED - ANNUAL FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017

ANNUAL FINANCIAL STATEMENTS

2017

OUR

MISSION

To create value for our shareholders, our employees and our business
and social partners through safel y and responsibly exploring, mining and
marketing our products. Our primary focus is gold, but we will pursue value
creating opportunities in other minerals where we can leverage our existing
assets, skills and experience to enhance the delivery of value.

Safety is our first value.

We place people first and correspondingly put the
highest priority on safe and healthy practices and
systems of work. We are responsible for seeking
out new and innovative ways to prevent injury
and illness in our business and to ensure that our
workplaces are free of occupational injury and
illness. We live each day for each other and use
our collective commitment, talents, resources and
systems to deliver on our most important
commitment... to care.

We treat each other with dignity
and respect.

We believe that individuals who are treated
with respect and who are entrusted to take
responsibility, respond by giving their best. We
seek to preserve people’s dignity, their sense
of self-worth in all our interactions, respecting
them for who they are and valuing the unique
contribution that they can make to our business
success. We are honest with ourselves and others,
and we deal ethically with all of our business and
social partners.

We value diversity.

We aim to be a global leader with the right people
for the right jobs. We promote inclusion and team
work, deriving benefit from the rich diversity of the
cultures, ideas, experiences and skills that each
employee brings to the business.

We are accountable for our actions and
undertake to deliver on our commitments.

We are focused on delivering results and we do
what we say we will do. We accept responsibility
and hold ourselves accountable for our work, our
behaviour, our ethics and our actions. We aim to
deliver high performance outcomes and undertake
to deliver on our commitments to our colleagues,
business and social partners, and our investors.

We want the communities and societies
in which we operate to be better off for
AngloGold Ashanti having been there.

We uphold and promote fundamental human
rights where we do business. We contribute
to building productive, respectful and mutually
beneficial partnerships in the communities in
which we operate. We aim to leave a legacy of
enduring value.

We respect the environment.

We are committed to continually improving our
processes in order to prevent pollution, minimise
waste, increase our carbon efficiency and make
efficient use of natural resources. We will develop
innovative solutions to mitigate environmental and
climate risks.

ANNUAL FINANCIAL STATEMENTS

2017

CONTENTS

SECTION 1

GOVERNANCE

SECTION 2

MANAGEMENT
DISCUSSION

SECTION 3

FINANCIAL
STATEMENTS

132

SECTION 4

OTHER

Audit and Risk
Committee–

Chairman’s letter

Chief Financial

Officer’s Review

Directors’ approval

Secretary’s certificate

Affirmation of
financial statements

Directors’ report

Independent

auditor’s

report

Group
financial statements

Company financial
statements

Annexure A:
Summary of significant
accounting policies

Principal subsidiaries
and operating entities

Shareholders’

information

Glossary of terms
and abbreviations

Administrative
information

Forward-looking statements

Certain statements contained in this document, other than statements of historical fact, including, without limitation, those concerning the economic
outlook for the gold mining industry, expectations regarding gold prices, production, total cash costs, all-in sustaining costs, all-in costs, cost

savings and other operating results, productivity improvements, growth prospects and outlook of AngloGold Ashanti’s operations, individually or in

the aggregate, including the achievement of project milestones, commencement and completion of commercial operations of certain of AngloGold

Ashanti’s exploration and production projects and the completion of acquisitions, dispositions or joint venture transactions, AngloGold Ashanti’s

liquidity and capital resources and capital expenditures and the outcome and consequence of any potential or pending litigation or regulatory
proceedings or environmental health and safety issues, are forward-looking statements regarding AngloGold Ashanti’s operations, economic

performance and financial condition. These forward-looking statements or forecasts involve known and unknown risks, uncertainties and other

factors that may cause AngloGold Ashanti’s actual results, performance or achievements to differ materially from the anticipated results,

performance or achievements expressed or implied in these forward-looking statements. Although AngloGold Ashanti believes that the
expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have
been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors,
changes in economic, social and political and market conditions, the success of business and operating initiatives, changes in the regulatory
environment and other government actions, including environmental approvals, fluctuations in gold prices and exchange rates, the outcome of
pending or future litigation proceedings, and business and operational risk management. For a discussion of such risk factors, refer to AngloGold

Ashanti’s annual reports on Form 20-F filed with the United States Securities and Exchange Commission. These factors are not necessarily all of

the important factors that could cause AngloGold Ashanti’s actual results to differ materially from those expressed in any forward-looking

statements. Other unknown or unpredictable factors could also have material adverse effects on future results. Consequently, readers are
cautioned not to place undue reliance on forward-looking statements. AngloGold Ashanti undertakes no obligation to update publicly or release any
revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated
events, except to the extent required by applicable law. All subsequent written or oral forward-looking statements attributable to AngloGold Ashanti
or any person acting on its behalf are qualified by the cautionary statements herein.

Non-GAAP financial measures

This communication may contain certain “Non GAAP” financial measures. AngloGold Ashanti utilises certain Non-GAAP performance measures

and ratios in managing its business. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the reported
operating results or cash flow from operations or any other measures of performance prepared in accordance with IFRS. In addition, the
presentation of these measures may not be comparable to similarly titled measures other companies may use. AngloGold Ashanti posts
information that is important to investors on the main page of its website at www.anglogoldashanti.com and under the “Investors” tab on the main

page. This information is updated regularly. Investors should visit this website to obtain important information about AngloGold Ashanti.

ANNUAL FINANCIAL STATEMENTS

2017

AUDIT AND RISK COMMITTEE – CHAIRMAN’S

LETTER

It is my pleasure to present, on behalf of the Audit and Risk Committee, an overview of the activities this committee performed

during the 2017 financial year. This report is presented in accordance with the company’s Memorandum of Incorporation (MOI),

the requirements of the Companies Act, No. 71 of 2008, as amended, (the Companies Act), Principle 8, 15 and the
recommended practices contained in the fourth King Report on Governance for South Africa (King IV), as well as the Audit and

Risk Committee’s formally approved charter, which is in line with the JSE Listings Requirements and is reviewed and approved

by the board on an annual basis.

ROLE AND FOCUS

The Audit and Risk Committee is an independent statutory committee and all members were appointed by the AngloGold Ashanti
shareholders at the Annual General Meeting (AGM) held on 16 May 2017. The Audit and Risk Committee has decision-making
authority with regards to its statutory duties and is accountable in this regard to both the shareholders and the board of AngloGold
Ashanti.

It is the Audit and Risk Committee’s principal regulatory duty to oversee the integrity of the group’s internal control environment

and to ensure that financial statements comply with International Financial Reporting Standards (IFRS) and fairly present the
financial position of the group and company and the results of their operations.

Management has established and maintains internal controls and procedures, which are reviewed by the Audit and Risk
Committee and reported on through regular reports to the board. These internal controls and procedures are designed to identify
and manage, rather than eliminate, the risk of control malfunction and aim to provide reasonable but not absolute assurance that
these risks are well managed and that material misstatements and/or loss will not materialise.

The board assumes ultimate responsibility for the functions performed by the Audit and Risk Committee, relating to the
safeguarding of assets, accounting systems and practices, internal control processes and preparation of financial statements in
compliance with all applicable legal and regulatory requirements and accounting standards.

COMPOSITION AND DUTIES

The Audit and Risk Committee comprises six independent non-executive directors who collectively possess the skills and
knowledge to oversee and assess the strategies and processes developed and implemented by management to manage the
business within a continually evolving business environment. I was again elected as chairman of the Audit and Risk Committee
and fulfilled this role during the 2017 financial year.

The Audit and Risk Committee’s duties as required by section 94(2) of the Companies Act, King IV, JSE Listing requirements and

board-approved terms of reference is set out in the Audit and Risk Committees annual work plan. These duties were discharged
as follows:

FINANCIAL REPORTING

●

reviewed the trading and market updates and the half year and full year results;

●

confirmed the integrity of the group’s Integrated Report, Annual Financial Statements and the Form 20-F;

●

reviewed the expertise, experience and performance of the finance function and Chief Financial Officer;

RISK MANAGEMENT, INTERNAL CONTROL, INTERNAL AUDIT AND COMBINED ASSURANCE

●

assessed the scope and effectiveness of the systems to identify, manage and monitor financial and non-financial risks;

●

reviewed the procedures for detecting, monitoring and managing the risk of fraud;

●

reviewed the scope, resources, results and effectiveness of the internal audit department;

●

approved the internal audit plan, monitored the execution of the approved plan and approved subsequent changes to the
approved plan;

●

ensured that a combined assurance model is applied to provide a co-ordinated approach to all assurance activities;

EXTERNAL AUDITORS

●

nominated the appointment of independent external auditors by the shareholders;

●

reviewed and approved the terms of engagement as contained in the engagement letter of the external auditors;

●

approved the remuneration of the external auditors;

ANNUAL FINANCIAL STATEMENTS

2017

EXTERNAL AUDITORS

CONTINUED

●

approved the integrated audit plan of the external auditors;

●

pre-approved all non-audit services in line with the formal policy on non-audit services;

●

after considering the written confirmation of the auditor’s independence and the length of tenure assessed that there were

no impediments on the external auditors’ independenceand the effectiveness of the group ’s external audit function;

●

approved the appointment of the external auditors to provide independent reasonable and/or limited assurance on certain
sustainability indicators as included in the Sustainable Development Report;

●

in terms of the JSE listing requirement 3.84(g):

●

the Committee satisfied itself that the external auditor is accredited on the JSE list of Auditors and Accounting
Specialists, and that the individual auditor responsible for performing the functions of the auditor, does not appear on
the JSE list of disqualified individual auditors, as set out in Section 22;

●

considered the results of the most recent IRBA (Independent Regulatory Board of Auditors - South Africa) and PCAOB
(Public Company Accounting Oversight Board - United States of America) review results and concluded that there
were no significant matters reported;

●

consider the decision letter for all other engagement file reviews of the engagement partner; and

●

consider all legal proceeding outcomes against the external auditor for the past 7 years.

GOVERNANCE

●

reviewed developments in reporting standards, corporate governance and best practice;

●

monitored the governance of information technology (IT) and the effectiveness of the group’s information systems;

●

reviewed the adequacy and effectiveness of the group’s compliance function; and

●

evaluated the effectiveness of the committee through an external assessment.

PROCEEDINGS AND PERFORMANCE REVIEW

During 2017, the Audit and Risk Committee formally met 5 times and meetings were attended by all members of the committee.

R Gasant (Chairman) – BCompt (Hons), CA (SA), ACIMA, Executive Development Programme

5/5

Prof LW Nkuhlu - BCom, – CA (SA), MBA – Retired May 2017

3/3

MJ Kirkwood – AB, Economics & Industrial Engineering

5/5

R Ruston – MBA Business, BE (Mining)

5/5

M Richter – BA, Juris Doctor

5/5

A Garner – BSE, Aerospace and Mechanical Sciences

5/5

S Zilwa* – BCompt (Hons), CA (SA), Advanced Diploma in Financial Planning, Advanced

Taxation Certificate, Advanced Diploma in Banking – Appointed at the May 2017 AGM

2/2

* SV Zilwa, although appointed to the board with effect from 1 April 2017, her appointment as The Audit and Risk Committee member was

effective from 16 May 2017.

The Chief Financial Officer, Senior Vice President: Finance, Group General Counsel and Company Secretary,
Senior Vice President: Group Internal Audit, Group Tax Manager, Group Risk Manager, Chief Information Officer,
Group Compliance Officer, the External Auditors, as well as other assurance providers are invited to attend committee meetings
in an ex officio capacity and provide responses to questions raised by committee members during meetings. The full Audit and
Risk Committee meets separately during closed sessions with management (including the Chief Executive Officer), internal audit
and external audit at every scheduled quarterly meeting.

The Audit and Risk Committee was subjected to an independent external assessment during 2017. The assessment focused on
its effectiveness. The results of the assessment were discussed, actions taken and processes put in place to address areas
identified for improvement.

ANNUAL FINANCIAL STATEMENTS

2017

HIGHLIGHTS OF 2017

In addition to the execution of the Audit and Risk Committee’s statutory duties, set out below are some highlights from

2017:

Focus Area

Actions

Financial Reporting

Market updates, half-year
and annual IFRS reports

Reviewed and recommended the trading and market updates, half-year and annual IFRS
financial statements to the board for approval and subsequent submission to the JSE, SEC
and other stock exchanges as applicable, after:

●

ensuring that complex accounting areas comply with IFRS;

●

carefully evaluating significant accounting judgements, including but not limited to
environmental rehabilitation provisions, taxation provisions and the valuation of the
portfolio of assets (including impairments) and estimates;

●

discussing the accounting treatment of significant accounting and auditing matters as well
as non-routine transactions with management and the external auditors including the
accounting for the disposal of certain of the South African assets, the restructuring of some
of the South African operations; the provision for the silicosis class action;

●

reviewing and assessing the disclosure of contingent liabilities, commitments and impact
of outstanding litigation in the financial reports;

●

reviewing, assessing and approving adjusted and unadjusted audit differences reported by
the external auditors;

●

reviewing and assessing management’s assessment of impairment indicators and

identified impairments;

●

reviewing the key audit matters communicated by the external auditors in their audit report
in terms of International Standard on Auditing 701;

●

reviewing the dividend proposal, including the solvency and liquidity report submitted by
management for recommendation to the Board;

●

reviewing and approving the filing of the Form 20-F with the SEC;

●

reviewing the representation letter that management will be required to sign; and

●

considering and approving management’s documented assessment of the company’s

going concern status including key assumptions.

New accounting standards

The Audit and Risk Committee considers the significance of new standards, interpretations and
amendments to standards in issue that are not yet adopted but are likely to affect the financial
reporting in future years. During 2017, the following were considered:

●

IFRS 15 - Revenue recognition, effective date 1 January 2018 - the impact will be limited to
the recognition of by-product revenue in Revenue from product sales. Revenue from
product sales includes Gold Income and by-product revenue. This change in classification
results in a consequential increase in costs of sales, and therefore will not have an impact
on previously reported Gross profit.

●

IFRS 9 -

The Group’s financial assets include debt instruments (held to maturity bonds and

negotiable certificates of deposit), cash restricted for use and cash and cash equivalents
which will be subject to IFRS 9 expected credit loss model as they are to be carried at
amortised cost. The accounting policy for listed equity investments will depend on the
nature of the listed investment. Listed equity investments which are held to meet
rehabilitation liabilities in future will be classified as fair value through profit and loss. Listed
equity investments held for other purposes will be classified as fair value through other
comprehensive income. Financial liabilities are currently carried at amortised cost with no
requirements to change their recognition or presentation under IFRS 9. We have
evaluated the possible impact of the adoption of IFRS 9, effective date 1 January 2018,
including the expected credit loss model and we do not expect the adoption to have a
significant impact on total assets, total liabilities or the results of the group.

●

IFRS 16 - Leases - with an effective date of 1 January 2019, it is likely to affect future
financial reporting and we are still assessing all of the potential consequences. With the
removal of the operating lease classification, leases that are within the scope of IFRS 16
will result in increase in assets and liabilities. We expect an increase in depreciation
expense and in cash flow from operating activities as the lease payments will now be
recorded as financing outflows in our cash flow statement. Management expects that the
mining and drilling contracts which are not finance leases under the current accounting
standards, will potentially have the most impact on adoption of IFRS 16.

ANNUAL FINANCIAL STATEMENTS

2017

Focus Area

Actions

Tax exposure

Tax, tax exposures, effective
tax rate, tax related
judgements

Reviewed and approved the group's tax strategy and tax management policy. Received the
quarterly update on the management of the group’s tax exposures (including uncertain tax

positions) with specific focus on:

●

effective tax rates;

●

impact that pending changes to legislation will have on fiscal duties; and

●

pending litigation in terms of tax exposure and the appropriate accounting thereof.

Mineral Resource and Ore Reserve Report

Annual Mineral Resource
and Ore Reserve Report

Reviewed and recommended for approval the annual Mineral Resource and Ore Reserve Report
prepared in accordance with the minimum standards described by the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code,
2012 Edition), and also conform to the standards set out in the South African Code for the
Reporting of Exploration Results, Mineral Resources and Mineral Reserves (The SAMREC
Code, 2016), after:

●

discussing the internal control environment associated with the mineral resource and ore
reserve estimation process;

●

receiving confirmation that the Competent Persons appointed approved the mineral
resources and ore reserves; and

●

reviewing and assessing for reasonableness the year-on-year reconciliation of the
mineral resources and ore reserves.

Corporate governance

King IV

Monitored the progress of assessing the recommended practices underpinning the
16 Principles of King IV applicable to AngloGold Ashanti ensuring that an ethical culture is
created that supports the effective control of the organisation at all levels, measuring the
performance of the organisation from an economical, societal and environmental perspective
and ensuring a legitimate and sustainable business.

Subsidiary Audit and Risk
Committees

Monitored the proceedings of relevant statutory subsidiary Audit and Risk Committees during
each of its meetings.

Risk Management

Reviewed and approved the risk management policies, standards and processes; received
and considered reports from the Group Risk Manager in relation to the key strategic and
operational risks facing the company; and received presentations on the following emerging
risks and topics to obtain an in-depth analysis and understanding:

●

Tax risk;

●

Security and insurance cover for bullion at operations; and

●

Cyber Security.

IT Governance

The Audit and Risk Committee received and reviewed detailed reports from the Chief
Information Officer on the group’s information and technology framework and had detailed

discussions around cyber security including inherent risks and vulnerabilities within the current
AngloGold Ashanti landscape. The Audit and Risk Committee considered the current action
plans in place to manage the associated risk exposure. The Audit and Risk Committee
also monitored the successful implementation of SAP at Siguiri - Guinea.

Combined Assurance

The Audit and Risk Committee closely monitored the actions implemented by management
during 2017 to further enhance the AngloGold Ashanti combined assurance model and to
ensure integration between the various in-house assurance providers. The aim of the
combined assurance process is to enable an effective integrated internal control environment
that supports the integrity of information used for internal decision-making by management,
the Board and its committees as well as supporting the integrity of external reports.

The Audit and Risk Committee considers the current model as effective and efficient in that it
fully integrates with the risk management function. It will however continue to monitor it in
light of the ever changing operational environment.

Sarbanes-Oxley Compliance
(SOX)

The Audit and Risk Committee has overseen the SOX compliance efforts of management
through receiving quarterly updates on controls associated with financial reporting and
assessed the final conclusion reached by the Chief Executive Officer and Chief Financial
Officer on the effectiveness of the internal controls over financial reporting.

ANNUAL FINANCIAL STATEMENTS

2017

Focus Area

Actions

Compliance

The Audit and Risk Committee continued to monitor the refinement of the global compliance
governance framework that allows for a systematic risk-based approach for group, regions and
operations to identify and monitor compliance to major laws, regulations, standards and codes.
Received formal feedback from the Group Compliance Officer on the outcome of the
independent quality assurance review performed on the compliance function during 2017 for
which the overall conclusion was satisfactory.

Litigation matters

The Audit and Risk Committee received and considered reports on significant litigation matters
and assessed the possible impact thereof on the group financial results.

INTERNAL AUDIT

Group Internal Audit is a key independent assurance and consulting business partner within AngloGold Ashanti under the
leadership of the Senior Vice President: Group Internal Audit who has direct access to the chairmen of both the Audit and Risk
Committee and the Board. The Senior Vice President: Group Internal Audit who reports functionally to the Audit and Risk
Committee and administratively to the Chief Financial Officer, is not a member of the Executive Committee but has a standing
invitation to attend these meetings when required. As part of its mandated responsibilities, the Audit and Risk Committee has
assessed the performance of the Senior Vice President: Group Internal Audit in terms of the annually reviewed and approved
internal audit charter and is satisfied that the internal audit function is independent and appropriately resourced, and that the
Senior Vice President: Group Internal Audit has fulfilled the obligations of the position by performing the following functions and
reporting to the Audit and Risk Committee on:

●

evaluating ethical leadership and corporate citizenship within AngloGold Ashanti;

●

assessing the governance of risk within AngloGold Ashanti;

●

reviewing the governance of Information Technology within AngloGold Ashanti;

●

assessing compliance with laws, rules, codes and standards within AngloGold Ashanti;

●

evaluating the effectiveness of internal controls over financial reporting and internal controls in general;

●

reporting findings to management and the Audit and Risk Committee and monitoring the remediation of all significant
deficiencies reported; and

●

implementing a Combined Assurance Framework for the group.

The Audit and Risk Committee considered the internal control heat-map for AngloGold Ashanti as presented by Group Internal
Audit and monitored the implementation of significant audit recommendations through a formal tracking process.

As Chairman of the Audit and Risk Committee, I meet with the Senior Vice President: Group Internal Audit in private before each
meeting and on an ad-hoc basis throughout the year.

The Audit and Risk Committee is of the opinion, having considered the written assurance statement provided by Group Internal

Audit, that nothing has come to its attention indicating that the group’s system of internal financial controls is not effective and

does not provide reasonable assurance that the financial records may be relied upon for the preparation of the annual financial
statements.

EXTERNAL AUDIT

The audit cycle at AngloGold Ashanti is continuous as the External Auditor performs half yearly reviews on the results of the
group. During August 2017, the annual integrated audit plan, the associated fees and the 2017 global engagement letter were
tabled at the committee meeting for consideration and approval.

As Chairman of the Audit and Risk Committee, I meet with the primary engagement team members in private before each
scheduled meeting where I am also briefed on general matters relating to the accounting and auditing profession as it may impact
on AngloGold Ashanti.

As part of its ongoing assessment of the independence and effectiveness of the external auditors, the Audit and Risk Committee
has also considered during its evaluation of the independence of the Ernst & Young factors such as:

●

the tenure of service;

●

the quality of planning, delivery and execution of the audit;

●

quality and knowledge of the audit team, specifically the senior management team, including the lead engagement partner,

●

the results of the most recent IRBA and PCAOB regulatory reviews and the responses of the firm on observations raised in
these reports;

●

outcome of the service quality assessment review performed during the first half of 2017; and

●

the robustness of the audit, including the audit team’s ability to challenge management as well as demonstrate professional

scepticism and independence.

ANNUAL FINANCIAL STATEMENTS

2017

To further safeguard auditor independence, a formal policy on the approval of all non-audit related services has been approved
and implemented. In terms of the policy the Audit and Risk Committee has established that the sum of the non-audit and tax fees
in a year must not exceed 40% of the sum of the audit and audit related fees in the year. The Audit and Risk Committee received
an update on the tax and non-audit fees as a percentage of the total audit and audit related fees with each request and is
comfortable that the external auditor’s independence had not been jeopardized.

During 2017, the external audit fees comprised of audit services ($6.14m), audit related services ($0.73m), non-audit fees
($0.04m) and tax services ($0.16m).

The Audit and Risk Committee did not note any significant findings and considers the service provided by the external auditors to
have been independent, effective and robust.

TRANSFORMATION OF THE EXTERNAL AUDIT

In the spirit of AngloGold Ashanti’s commitment to transformation, the Audit and Risk Committee closely monitors and guides the

transformation within the context of the external audit. The current auditors Ernst & Young Inc. (EY) are level 1 contributors and
under the guidance of the Audit and Risk Committee, certain AngloGold Ashanti subsidiaries, such as Mine Waste Solutions and
the Rehabilitation Trust, are audited by Nexia SAB&T, a level 1 contributor. In addition, Nexia SAB&T also performs certain audit
work of the South African operations under the supervision of EY.

FINANCE FUNCTION AND CHIEF FINANCIAL OFFICER

The Audit and Risk Committee received feedback on an internal assessment conducted on the skills, expertise and resourcing of
the finance function and was satisfied with the overall adequacy and appropriateness of the function. The Audit and Risk
Committee further reviewed the expertise and experience of the Chief Financial Officer, Christine Ramon and was satisfied with
the appropriateness thereof.

As Chairman of the Audit and Risk Committee, I meet with the senior finance team in private before each scheduled meeting
where I am also briefed on general matters relating to the administration of the finance function, the effectiveness of the internal
control environment associated with financial reporting as well as any transactions that may require additional consideration in
terms of accounting.

WHISTLEBLOWING

The Audit and Risk Committee received quarterly updates on AngloGold Ashanti’s whistleblowing process. Reports received and

investigated did not reveal any malpractice relating to the accounting practices, internal financial controls, internal audit function

or the content of the company’s and group’s financial statements.

During the year 187 reports were received which is consistent with the number of reports received in 2016 (162). We have noted
an increase in the number of reports from the Continental Africa Region and as a committee view this as a positive reflection of a
greater awareness and understanding of the benefits of the whistle-blowing process. As a committee, we are comfortable that
each report received is taken seriously and thoroughly investigated.

TAX GOVERNANCE AND STRATEGY

The Audit and Risk Committee received and reviewed detailed reports from the Chief Financial Officer and Vice President: Global

Taxation, jointly, on the group’s tax position, including uncertain tax positions, tax provisions, status of the group’s tax compliance

globally and relevant global fiscal developments impacting the group.

The co

mmittee also approved the group’s tax strategy and tax management policy, which together, set out the group’s approach

to tax in areas such as tax efficiency, tax risk management and tax governance and oversight, which is more fully explained in the
Integrated Report.

LOOKING FORWARD

The Audit and Risk Committee realises that its work is increasingly broad and complex and as a committee we are required to
stay on top of developments impacting AngloGold Ashanti.

During 2018, the Audit and Risk Committee will continue to monitor:

●

the refinement of the disclosures provided in terms of the Principles as defined in the King IV code;

●

the impact of the new leases accounting standard applicable from 1 January 2019 on the existing accounting policies and
contracts in place; and

●

the progress made in the XBRL tagging process for CIPC filing purposes.

ANNUAL FINANCIAL STATEMENTS

2017

In the spirit of continuous refinement and improvement of the group’s combined assurance model and changing operational risk

profile, the Audit and Risk Committee will continue to monitor the successful integration of the core technical engineering and
mining disciplines into the combined assurance review process where so dictated by risk, during 2018.

STATEMENT OF INTERNAL CONTROL

The opinion of the Board on the effectiveness of the internal control environment is informed by the conclusion of the Audit and
Risk Committee.

Based on the assessment by the Audit and Risk Committee of the results of the formal documented review conducted by Group
Internal Audit and other identified assurance providers in terms of the evolving combined assurance model of the group’s system

of internal controls and risk management, including the design, implementation and effectiveness of the internal financial controls
and considering information and explanations given by management and discussions with both the internal and external auditors
on the results of their audits, nothing has come to the attention of the board that caused it to believe that the company’s system of

internal controls and risk management is not effective and that the internal financial controls do not form a sound basis for the
preparation of reliable financial statements.

ANNUAL FINANCIAL STATEMENTS

The Audit and Risk Committee evaluated the consolidated and separate annual financial statements for the year ended
31 December 2017 and concluded that they comply, in all material aspects, with the requirements of the Companies Act,
International Financial Reporting Standards, and JSE Listing Requirements. The Audit and Risk Committee therefore
recommended the approval of the annual financial statements to the board.

CONCLUSION

The Audit and Risk Committee is satisfied that it has considered and discharged its responsibilities in accordance with its
mandate, statutory responsibilities and terms of reference during the year under review.

Rhidwaan Gasant

Chairman: Audit and Risk Committee
19 March 2018

ANNUAL FINANCIAL STATEMENTS

2017

CHIEF FINANCIAL OFFICER’S REVIEW

AngloGold Ashanti continued to make considerable enhancements to the quality of its portfolio during the year
ended 31 December 2017. The Company advanced the restructuring of its South African portfolio, including
some significant asset sales; executed, according to plan, the key self-funded brownfield projects to sustainably

improve mine lives and margins; and achieved its annual cost, production and capital guidance for the fifth
consecutive year.

Highlights of the year under review include:

●

Production rises 4% year-on-year to 3.755Moz, above top end of guidance

●

Total cash costs $792/oz, in line with full year guidance of between $750 to $800/oz

●

All-in sustaining costs of $1,054/oz, at lower end of the guidance range

●

Free cash flow $125m, before growth capital; impacted by South Africa restructuring costs and VAT lockups
in Continental Africa

●

Dividend of ZAR 70 cents per share (approximately 6 US cents per share) declared, given strong cash flow
performance

●

Adjusted Headline Earnings $9m, after retrenchment costs ($71m) and silicosis provision ($46m)

●

Brownfield projects to improve life and margins, all remain on schedule

●

New safety benchmarks set: three, straight fatality-free quarters for first time

●

Obuasi redevelopment approved on strong return metrics and good government support

●

SA restructuring progressing well; Moab Khotsong and Kopanang sales closed on 28 February 2018; and
TauTona in orderly closure

●

Strong reserve-replacement performance, declaration of maiden reserve in Colombia

EXECUTIVE SUMMARY

MARKET OVERVIEW

Global stock markets have ended 2017 on record highs, the MSCI all-country world index gained 22% or US$9tn on the year,
reaching an all-time high, all due to a strong global economy. Additionally, President Donald Trump’s tax reform policies and

central b

ank’s gradual and well messaged approach to easing financial support also contributed to the rising stock market. Even

the rival attractions of Bitcoin (up nearly 14 times over the year), concerns about a US lead nuclear war with North Korea, political
upheaval in Europe with the Catalan separatist movement in Spain and an inconclusive German election failed to dampen
sentiment. Surprisingly, the global volatility index is trading at historically low levels.

Given the strength of the global stock markets, it is surprising that the US dollar price of gold was up ~13 % for the year, its
biggest annual gain since 2010, outperforming all major asset classes other than stocks. The average US dollar gold price for the
year, however, remained stable when compared to the prior year. Supporting gold were, a weakening US dollar, elevated
price/earnings ratios and valuations that made many investors nervous of a potential pullback in stocks. Gold was thus seen as a
means of managing these risks. The geopolitical instability further heightened investor uncertainty and fuelled flows into gold.

International Monetary policy tightening was implemented across the globe pushing up global short-term bond yields while long-
term yields remained relatively flat. Central Banks were also very active in the gold market, Russia increased its holdings
particularly in the final two months of the year. For 2017, the official sector remained an important source of demand for gold and
net purchases were up 123 tonnes (48%) to 381 tonnes compared to 2016 (258 tonnes).

Jewellery consumption for 2017 was up by ~13% compared to 2016, with all the major physical regions recording year-on-year

gains. India’s jewellery consumption increased by ~8% in the final quarter, helped by a surge in sales during Dhanteras (1^st day of

Diwali) and lower prices toward year end. Jewellery fabrication also increased by ~6% in 2017. Chinese demand slipped by 2%
year-on-year, with ongoing losses in the pure gold segment as consumer preferences continued to shift towards more
fashionable, but lower gold content pieces. Total physical demand increased from 946 tonnes (Q3) to 1,093 tonnes (Q4) or 16%
(147 tonnes). On an annual basis, physical demand was up ~11% from ~3,556 tonnes (2016) to ~3,932 tonnes (2017).

Supply was broadly unchanged for the quarter as lower mine production was offset by reduced hedging activity, while scrap
volumes remained flat year-on-year.

ANNUAL FINANCIAL STATEMENTS

2017

Investors continued to add gold to their portfolios, with inflows into global gold-backed exchange-traded funds totalling US$8.2bn
or 6.72moz. Speculators increased their gold net long position by 7.36moz year-on-year on the Commodity Exchange (Comex)
underpinning the positive sentiment in the gold market.

The daily closing price of gold averaged US$1,276.54/oz for the quarter. December was the most volatile month where the price
fell to as low as US$1,243.46/oz, but also reached the high of the year of US$1,307.60/oz. The gold price finally closed the year
off at US$1,302.45/oz. The gold price averaged US$1,257.89/oz in 2017, US$11 higher than in 2016. The average price received
for gold sales for the year was recorded at US$1,258/oz.

GROUP PERFORMANCE

AngloGold Ashanti continues to make progress on its strategic objectives and has delivered a strong financial and operating
performance. The financial results for the year have been impacted by some significant once-off charges and impairments, but
cash flows and the balance sheet remain robust.

Total cash costs for the full year of $792/oz were 6% higher than the previous year’s $744/oz, and within the guidance range of

between $750/oz to $800/oz. Costs were negatively impacted by inflation, stronger local currencies and the expensing of certain
capital costs at the South African operations as those operations underwent orderly closure. All-in sustaining costs came in at the
bottom end of the guidance range at $1,054/oz, 7% higher than the previous year AISC of $986/oz due to higher planned
sustaining capital expenditure levels in addition to the stronger local currencies.

Cash flow from operating activities for the year ended 31 December 2017 declined by 16% when compared to 2016, reflecting
tighter margins, working capital lockups, and payments in respect of retrenchment costs in South Africa, offsetting a 1% increase
in the gold price received and a 5% increase in gold sales. Free cash flow of $1m for the year, compared to $278m in 2016, was
supported by a strong second half performance which delivered free cash flow of $162m. This was, however, impacted by the
increase in the lockup of VAT receivables at Kibali and Geita, which was approximately $20m and $50m for the year respectivel y,
and the higher planned capital expenditure. In line with the reinvestment strategy of AngloGold Ashanti, total self-funded capital
expenditure of $953m increased by $142m from the previous year (2016: $811m).

Free cash flow for the year, before taking growth capital into account, was $125m versus $394m a year earlier, impacted by 19%
higher planned sustaining capital expenditure of $829m compared to the previous year of $695m, South African retrenchment
costs paid of $49m and higher cash costs.

The balance sheet reflects strong liquidity comprising $965m available on the $1bn US dollar syndicated RCF at the end of
December 2017, $85m undrawn on the $100m US dollar RCFs, A$290m undrawn on the A$500m Australian dollar RCF,
approximately R2.95bn available from the South African RCFs and other facilities and cash and cash equivalents of $205m as at
the end of December 2017.

We continue to focus our efforts on reducing our taxation exposures, specifically indirect taxes, in all jurisdictions that we operate
in. Our transparent group tax policy continues to support a low risk approach in dealing with tax matters across the various
jurisdictions in which we operate.

Other pertinent matters include:

● At the end of June 2017, AngloGold Ashanti announced that it would restructure its South African Operations to safely return

the business to profitability, whilst mitigating job losses. This included placing TauTona and Savuka into care and
maintenance, to be followed by orderly closure. In October 2017, we announced the sale of the Kopanang Mine and related
infrastructure to Heaven-Sent SA Sunshine Investment Company Limited (Heaven-Sent), with one of the conditions being that
the majority of existing workers continue to work at the operations. Simultaneously, we announced the conclusion of the sale
agreement for the disposal of the Moab Khotsong and Great Noligwa mines and related infrastructure to Harmony Gold
Mining Company Limited (Harmony). All the conditions precedent to these sale contracts were met and the transactions
closed on 28 February 2018.

● Agreement has been reached with the Government of Ghana for the redevelopment of Obuasi Gold mine, subject to

ratification by Ghana’s parliament of the relevant fiscal and development agreements. These agreements have been signed

by the Government and ratification is scheduled during the current parliamentary sitting. The redevelopment will establish
Obuasi as a long-life, modern, mechanised underground mining operation, which is a fundamental departure from the
previous operating method used at the mine.

● The Democratic Republic of the Congo (DRC) has recently promulgated a new mining code that makes a number of changes

to the operating environment for the DRC’s extractive industries, including those in its mining, and oil and gas sectors. On

8 March 2018, AngloGold Ashanti announced that a meeting had been held between the DRC president and mining industry
representatives to discuss the new mining code prior to its promulgation. The DRC government has agreed to continue
discussions with the mining industry representatives post the promulgation of the new mining code regarding issues existing
in the current agreement and the implementation of the new mining code. AngloGold Ashanti is in full support of Randgold
Resources, our partner and the operator in the Kibali joint venture, in its continued engagement with the DRC government.

ANNUAL FINANCIAL STATEMENTS

2017

● The settlement negotiations between the Occupational Lung Disease Working Group and class action legal representatives

have reached an advanced stage. The Working Group represents African Rainbow Minerals, Anglo American SA, AngloGold
Ashanti, Gold Fields, Harmony and Sibanye-Stillwater. The class members are represented by Richard Spoor Inc, Abrahams
Kiewietz Inc and the Legal Resources Centre. On 10 January 2018, in response to a request from all parties involved in the
appeal to the Supreme Court of Appeal (SCA) in respect of the silicosis and tuberculosis class action litigation, the Registrar
of the SCA postponed the hearing date of the appeal until further notice.

FOCUSING ON MARGINS

We continue to focus our efforts on driving operational excellence and cost efficiency across our business, regardless of the gold
price environment in which we operate and over which we have no control.

Despite stronger currencies and inflationary pressures, our continued focus on meeting production targets, strong cost
management and stringent capital discipline, has resulted in the AISC margin increasing from 17% in the second half of last year,
to 19% in the last six months of 2017. This is especially encouraging given the flat gold price and is illustrated in the graph that
follows.

For the full year, the AISC margin decreased from 21% to 16%, mainly the result of currency and inflation pressure on cash costs.
We, however, continue to pursue efficiencies and productivity and attempt to improve margins on a sustainable basis and will be
working hard to ensure that these efforts are reflected in the AISC margin in the coming year.

We will continue to work towards widening these margins, by focusing on the controllable factors, including:

●

stringent cost management;

●

reinvestment in low capital, high return opportunities within our business; and

●

continuing to drive our Operational Excellence Programme, i.e. considering innovative ways to improve efficiencies and
productivity in our operations.

*World Gold Council standard adjusted to exclude stockpile write-offs

ANNUAL FINANCIAL STATEMENTS

2017

CONTINUED FINANCIAL FLEXIBILITY

We saw a slight rise in net debt from $1.9bn to $2.0bn, mainly as a result of higher capital expenditure, the funding of the South
African retrenchment costs and VAT lockups in Continental Africa, all of which were partially offset by a reduction in interest paid
of $34m. The net debt to adjusted EBITDA is 1.35 times, slightly up from 1.24 times at the end of 2016, however, reflecting an
improvement from 1.56 times at the end of June 2017. The ratio shows ample headroom compared to our covenant levels of 3.5
times.

Our liquidity position has improved from $1.58bn at the end of December 2016 to $1.72bn at the end of 2017, reflecting the
additional facilities put in place to assist with our South African funding requirements. Proceeds from the Moab Khotsong sale
transaction that closed on 28 February 2018, have been applied to reduce our South African debt ($218m as at 31 December
2017), which will benefit our South African interest bill going forward by ~$20m.

Our balance sheet remains robust with strong liquidity, sufficient undrawn facilities and no near-term maturities, giving us the
flexibility in what remains a volatile market environment. We have demonstrated our ability to self-fund our high-return
reinvestment opportunities, whilst sustaining our cash dividend, reflecting our commitment to disciplined capital application.

CONTINUED POSITIVE CASH FLOW MOMENTUM

We continue to follow a balanced approach, i.e. positive free cash flow generation while reinvesting in our portfolio:

ANNUAL FINANCIAL STATEMENTS

2017

We indicated a year ago that our new dividend policy is to return 10% of free cash flow, before growth capital, to shareholders,
sub

ject to the board’s discretion. Volatility is to be expected in the dividend payout, given the basis used for the calculation

coupled with our variable reinvestment needs, as demonstrated with the 19% planned increase in sustaining capital expenditure
for 2017 to $829m.

Free cash flow before growth capital was $125m (2016: $394m). The board has exercised its discretion by adjusting the metric of
free cash flow before growth capital to take into account the abnormal South African retrenchment payments of $49m, and has
approved a dividend of 70 ZAR cents or approximately 6 US cents per share.

The continuation of the dividend is a reflection of our capital discipline and commitment to improving shareholder returns on the
back of sustainable free cash flow generation. Importantly, we will maintain adequate balance sheet flexibility and utilise our cash
flows and available facilities to fund our ongoing capital and operational requirements.

INWARD FOCUS ON CAPITAL EXPENDITURE AND GROWTH

Total capital expenditure (including equity accounted investments) was $953m, at the lower end of the market guidance of
between $950m to $1,050m, and included project capital expenditure of $124m invested in growth projects at Siguiri and Kibali in
Continental Africa and Mponeng in South Africa. Sustaining capital increased 19% to $829m, compared to $695m in 2016,
reflecting increased investment at Geita in Tanzania and at both of our operations in Australia. This higher level of spend w as
largely aimed at improving mine lives and margins across the portfolio. Capital expenditure in Continental Africa increased by
$109m (including equity accounted investments), with higher expenditure on underground development at Geita and the cutback

at Iduapriem’s Teberebie pit, which extends the life of the operation by about a decade. In Australia, expenditure at Tropicana

increased to $91m as mine optimisation work and additional stripping costs, geared to improve the medium- and longer-term
profitability of the mine, progressed.

Our project pipeline reflects an abundant portfolio being developed and ready for development in the mid-term:

Our primary objective remains margin enhancement, rather than production growth. We continue to strategically position the
group to achieve sustainable cash flow, providing us with the balance sheet flexibility to make decisions around our future
investments. We use an ore reserve price of $1,100/oz in our estimated life of project models, which is prudent compared to our
peers. Our long-term planning assumptions for projects are also conservative and incorporate the financial impact of
environmental rehabilitation expenditure over the life of the project.

Our disciplined approach to planning and growth, has assisted us in making proper investment decisions across our portfolio. In
general, our AIC remains within close proximity of our current reserve price, leaving us with a significant cushion when compared
to the average three-year gold price and current spot price.

We remain firmly in the reinvestment camp, with a pipeline of very good, high-return brownfields opportunities that will improve
our production mix as can be seen from the table above. We will continue to look for ways to unlock value by making fundamental
and lasting improvements through innovation, rather than only by large capital investments.

ANNUAL FINANCIAL STATEMENTS

2017

In terms of our guidance, we continue to prioritise stay in business capital, ore reserve development and asset integrity capital to
ensure the sustainability of our operations. These types of capital expenditure are anticipated to make up approximately 75% of
our capital expenditure in 2018.

AngloGold Ashanti’s approach to growth investments and project approvals is based upon a multi-factor model, primarily founded

in maximising investment returns and value whilst also taking into account all factors that form the five pillars of AngloGold

Ashanti’s strategy, in particular how the particular investment/project will improve AngloGold Ashanti’s portfolio, financial

flexibility, sustainability considerations and long term optionality. The particular project or investment must generate returns that
meet our required hurdle rates of 15% real in USD terms, which significantly exceeds our cost of capital. Our projects must also
increase cash generation and margins through increased production at reduced operating costs as well as increase AngloGold

Ashanti’s long term optionality including extending its Ore Reserve life.

DELIVERY AGAINST 2017 FINANCIAL OBJECTIVES

Maintain our focus on cost and capital discipline to deliver competitive all-in sustaining costs and all-in costs

The group continues to focus on sustainably reducing the cost associated with producing gold. These initiatives have
covered a broad spectrum of activities, including a greater focus on capital allocation and project delivery, as well as
enhanced recoveries, while internal cost reduction efforts continued simultaneously. AISC for the year ended at $1,054/oz,
a 7% increase from 2016 at $986/oz. AISC came in at the bottom end of the guidance range reflecting the effect of planned
higher sustaining capital expenditure for 2017 (~$26/oz) and stronger local currencies. The South African rand averaged 9%
stronger versus the dollar in 2017 compared with 2016, and the Brazilian real and Australian dollar averaged 8% and 3%
stronger, respectively.

We continued to roll-out our wider-focused Operational Excellence Programme across all our operations, with our
restructuring efforts in South Africa assisting us on improving the profitability and sustainability of our remaining assets in
South Africa.

Continue to enhance margins and cash flow through continuing focus on operational efficiencies and productivity

Our margins on total cash costs (37%), AISC (16%), and AIC (10%) came under pressure in 2017 because of stronger local
currencies and higher planned sustaining capital expenditure. This increased expenditure was required to ensure that we
continue to maintain and improve our margins and cash generation ability in future years. We remain committed to keep our
margins at acceptable levels and our performance in the second half of the year is reflecting margins on total cash costs
(38%), AISC (19%), and AIC (13%) returning to full year 2016 levels and higher levels than those achieved for second half-
year of 2016.

Cash flows remain positive despite funding once-off items such as the South African retrenchment costs. The strengthening
of the South African rand and Brazilian real was detrimental to us, given that most of our cost base in those countries is
denominated in the local currencies, while our gold is sold in US dollars, contributing to the 21% year-on-year increase in
total cash costs in South Africa and 10% increase in the Americas region. In contrast, although the Australian dollar
strengthened by 3%, total cash costs declined by 6% in that region.

Dividend underpinned by sustainable cash generation

Despite the significant headwinds experienced in 2017 in free cash flow generation, the Company declared a dividend of
ZAR 70 cents per share (~6 US cents per share) for the year under review. Free cash flow before growth capital, remained
sufficient to maintain the declaration of a dividend since the introduction of the new dividend policy last year.

Our focus with the substantial restructuring of the South African operations, combined with the South African asset sales, as
well as the significant planned sustaining capital expenditure in 2017, has been to be appropriately positioned to maintain
the dividend in future years underpinned by sustainable cash generation.

Move to a sustainable resolution at Obuasi

During 2017, significant positive developments at Obuasi resulted in AngloGold Ashanti announcing in February 2018 the
advancement of the redevelopment of the Obuasi project. Some of the beneficial developments in 2017 included the
security situation improving with the last enclave of illegal miners being evicted from site in April; the lifting of the Force
Majeure; the extension of the Amended Mining Programme entered into with the Government of Ghana until April 2018; and
the suspension of the international arbitration initiated by AngloGold Ashanti with the International Centre for Settlement of
Investment Disputes (ICSID).

ANNUAL FINANCIAL STATEMENTS

2017

All the above developments paved the way to allow for the successful negotiation with the Ghanaian Government and
conclusion of various agreements as listed below:

●

A Reclamation Security Agreement signed in July 2017;

●

A Tax Concession Agreement signed in July 2017;

●

A Development Agreement signed in January 2018;

●

A Security Agreement (provision of security for the mine against any illegal mining invasion) signed in February 2018;
and

●

A Settlement Agreement signed in February 2018.

These agreements have been signed by the Government, with the Tax Concession Agreement and the Development

Agreement subject to ratification by Ghana’s parliament, which is scheduled during the current parliamentary sitting.

Mine production for the first 10 years will be focused on the upper ore bodies and is expected to average 350,000 to
400,000oz at an average head grade of 8.1g/t. Total cash costs are expected to average between $590/oz to $680/oz, while
AISC are expected to be between $795/oz to $850/oz. Mine production for the second 10 years increases to 400,000 to
450,000oz per annum, as the mine deepens into higher grade ore. AISC is then expected to improve to between $750/oz to
$800/oz. The project delivers internal real rates of return of between 16% and 23% at real gold prices of between $1,100/oz
and $1,240/oz, and is highly leveraged to the gold price. Initial project capital expenditure anticipated over the first 2.5 years
is expected to be between $450m to $500m, excluding pre-production capital of $64m. The project implementation will be
undertaken in two distinct phases and after the completion of phase 2, extended project capital expenditure of $94m will
continue through to year six, covering the development of the Obuasi Deeps Decline (ODD) to the lower level of the mine,
refurbishment of the KMS shaft, installation of new underground pump stations and construction of the flotation tailings
storage facility. The project has a current life of more than 20 years.

The redevelopment will establish Obuasi as a long-life, modern, highly mechanised underground mining operation,
replacing the labour intensive, hand-held operating systems previously used at the mine. The redevelopment will deliver a
mine that makes use of automation and controls for better safety and improved operational efficiencies and consistency in
performance. It envisages a smaller, but more skilled workforce that can operate in a mechanised/automated environment
with a strong sense of accountability.

Execute on low capital, high return brownfields projects, while continuing to move long term projects up the value curve

We continue to execute on our robust brownfields exploration programme at most of our operations in the group as
described earlier.

There are a number of capital projects that we continued to focus on during the year, including the Obuasi redevelopment
project, discussed in the previous section.

At Kibali, the underground materials handling system and ore hoisting via the shaft were commissioned with ramp up
progressing. The paving on the central haulage level was completed during the year, allowing haulage from the ore passes
into the underground crushers to the shaft system. In addition, Kibali completed 2.7km of development from the declines
during the quarter. The construction of the third hydropower station at Azambi and the next phase of tailings storage facility
is scheduled for completion in 2018.

The Mponeng mine life will be extended through access to deeper, higher-grade ore via the development of a decline below
the current secondary shaft, with completion expected around mid-2018. Additional ventilation; water management; and ore
handling infrastructure are in the process of being constructed. A feasibility is being undertaken into deepening the

secondary shaft to further extend the mine’s life beyond 2026.

The Sadiola Sulphides project which will add sulphide-ore processing capability to the plant, continued to be evaluated.
Discussions with the Government of Mali continue regarding the project.

At Siguiri, we are investing about $115m over approximately two years to add a hard-rock plant to the current processing
infrastructure, providing the ability to develop the significant sulphide-ore potential that exists on the current concession.
The company is also building a new power plant at a cost of $43m, to provide electricity to the new facility. During 2017,
$67m was spent on the project and a total of $145m has been committed to date. The project remains largely on schedule
to be completed and the final costs are currently being reviewed as all major commitments have now been concluded.

Finally, we announced the declaration of the maiden Ore Reserve for the Gramalote project in Colombia of 63.7Mt @ 0.86
g/t gold comprising contained metal content of 1.8Moz, on an attributable basis. Gramalote represents a long-term option
for AngloGold Ashanti, and all avenues to realise value from this important asset remain open. Work will continue to
optimise all aspects of the project during its feasibility phase, which is currently under way.

ANNUAL FINANCIAL STATEMENTS

2017

Maintain financial flexibility and further reduction in finance costs

Our net debt to adjusted EBITDA ratio of 1.35 times reflect a marginal increase to 2016 at 1.24 times. This remains well
within our debt covenant level of 3.5 times. Coupled with the successful completion of the South African sales transactions
of Moab Khotsong and Kopanang at the end of February 2018, the proceeds which will be utilised to further reduce our
South African debt, we have successfully maintained financial flexibility and anticipate a further reduction in our finance
costs in 2018.

REVIEW OF GROUP’S PROFITABILITY, LIQUIDITY AND STATEMENT OF FINANCIAL POSITION FOR 2017

The key financial and operational metrics for 2017, when compared to 2016 and 2015, are as follows:

2017

2016

2015

Profitability and returns

Adjusted headline earnings

(1)

143

US cents per share

(Loss) profit attributable to equity shareholders

(191)

(85)

Return on net capital employed

(1)

Dividends declared per ordinary share

SA cents per share

130

US cents per share

Liquidity, cash flow and net debt

Net debt at year end

(1)

$bn

2.0

1.9

2.2

Free cash flow

(1)

278

141

Adjusted earnings before interest, tax, depreciation and
amortisation (Adjusted EBITDA)

(1)(3)

$bn

1.5

1.5

Net debt to Adjusted EBITDA

(1)(3)

Times

1.35

1.24

1.49

Operational metrics

Gold produced (from continued and discontinued
operations)

Moz

3.76

3.63

3.95

Average price received

$/oz

1,258

1,249

1,158

Total cash costs

(1)

$/oz

792

744

712

All-in sustaining costs

(1)(2)

$/oz

1,054

986

910

All-in costs

(1)(2)

$/oz

1,126

1,071

1,001

All-in sustaining cost margin

(1)(2)

(1)

Non-GAAP measures

(2)

Excludes stockpile write-offs

(3)

The adjusted EBITDA calculation is based on the formula included in the Revolving Credit Facility Agreements for compliance with the debt covenant formula

PRODUCTION, PROFITABILITY AND RETURNS

Production for the year of 3.755Moz exceeded the top end of guidance and was 4% higher than the previous year’s production of

3.628Moz despite the orderly closure of TauTona and Savuka. Stronger year-on-year operating performance across the
International Operations helped to more than offset the lower output from South Africa. In Australia, Sunrise Dam and Tropicana
saw the benefits of mine optimisation initiatives resulting in solid performances throughout the year. In Continental Africa, higher

grades at Geita and Siguiri contributed to the region’s 10% increase in production over the previous year. In the Americas, a solid

operating performance was bolstered by improved production from AGA Mineração. The strong performance across the portfolio,
particularly in the fourth quarter, demonstrated continued cost and operating discipline and improvements through internally-
funded, low-capital, high return brownfields investments.

At the South African operations tonnes mined were affected by a poor start up to the year at all operations, whilst the decision to
stop the loss-making operations in the third quarter further impacted full-year production. Underground yield dropped 8% to 6.93
g/t as a result of lower feed grades as well as higher dilution year-on-year. This was mainly due to an increase in waste tonnes at
Moab Khotsong, mining moving out of higher grade areas at Mponeng, and the reclamation of the tailing storage facilities at the
West Wits Surface Sources. The final blast took place at TauTona on 15 September and the Section 189 process continued at
Kopanang together with the pending disposal of the mine as announced in October. Both the Moab Khotsong and Kopanang sale
transactions were completed on 28 February 2018.

Production from the Continental Africa region increased significantly year-on-year as almost all operations delivered increased
production driven mainly by higher recovered grades at Siguiri, Iduapriem and Geita, together with higher tonnages in Mali. At
Siguiri, the production improvement was due to a 29% increase in recovered grade as a result of the mining of higher grade
areas, which included the new Seguelen pit, while at Iduapriem, production increased due to the 8% higher recovered grade from
mining deeper higher grade areas. At both operations, these increases in recovered grade were partly offset by decreases in

ANNUAL FINANCIAL STATEMENTS

2017

tonnage treated. At Geita, the increase in production was due to a 13% increase in recovered grade from mining higher grade ore
at Nyankanga cut 7 and cut 8, in line with the mining plan. Increased production is also supported by higher underground tonnes
in the current period as the underground ramp up continues. These factors were partly offset by a decrease in plant throughput.
Production volumes from the Americas region reflected stronger year-on-year contributions from both Brazil and Argentina,
attributable to operational improvements and an increase in tonnes treated. In Brazil, production increased as a result of
improved geological modelling at AGA Mineração which assisted the recovery from geotechnical challenges faced at the start of
the year at Córrego do Sitio. At Serra Grande, production was driven by higher tonnes treated supported by crushing and milling
efficiencies and more efficient leaching following the implementation of the Carbon-In-Leach project, this despite lower feed
grades. In Argentina, Cerro Vanguardia achieved its highest production level in 18 years, boosted by operational and
metallurgical improvements and an increase in tonnes treated at the plant.

Production from the Australian region improved due to higher mill throughput and feed grade, and a significant increase in
metallurgical recovery at Sunrise Dam and higher feed grade and mill throughput at Tropicana. Total cash costs decreased on
the back of improved production and favourable inventory movements. Higher head grades and improved metallurgical recovery
contributed to a 5% increase in production at Sunrise Dam in 2017. Tropicana’s production was 10% higher for the year

compared to 2016 due mainly to a 10% increase in mill throughput.

Total cash costs for the full year of $792/oz were 6% higher than the previous year’s $744/oz, and within the guidance range of

$750/oz-$800/oz. Costs were negatively impacted by inflation, stronger local currencies and the expensing of certain capital costs
at the South African operations as they underwent orderly closure. The South African rand averaged 9% stronger versus the
dollar in 2017 compared with 2016, and the Brazilian real averaged 8% stronger, contributing to the 21% year-on-year increase in
total cash costs in South Africa and 10% increase in the Americas region. In contrast, cash costs remained relatively flat in
Continental Africa and declined by 6% in Australia despite a 3% stronger Australian dollar. All-in sustaining costs came in at the

bottom end of the guidance range at $1,054/oz, 7% higher than the previous year’s AISC of $986/oz due to higher planned

sustaining capital expenditure levels in addition to the stronger local currencies.

Basic earnings for the year fell to a loss of $191m and was impacted by large once-off/abnormal items including the impairment
and derecognition of certain South African assets and goodwill amounting to $294m (pre-tax) as well as the silicosis provision of
$46m (post tax) both of which were non-cash in nature. However, the provision for retrenchment costs in South Africa of $71m
(after tax), had a cash impact of $49m for the year with the balance expected to impact on 2018 cash flows.

Moab Khotsong was reclassified as an asset held for sale and the carrying value of these assets had to be impaired to the fair
value of the sale consideration of $300m, less costs to sell. Furthermore, in calculating the impairment, the related deferred tax
assets of ~$81m could not be taken into consideration. This deferred tax benefit will only be recognised on the completion of the
transaction as part of the overall profit on the sale of Moab Khotsong in the first quarter of 2018.

Headline earnings were also significantly impacted by these once off charges, as only the impairments are permitted to be added
back in this calculation. Excluding the abnormal charges relating to the silicosis provision and the South African retrenchments,
headline earnings would have increased from $27m to $144m for the year, which reflects a 30% increase on the prior year on the
back of a strong operational performance.

LIQUIDITY, CASH FLOW AND STATEMENT OF FINANCIAL POSITION

Adjusted earnings before interest, tax, depreciation and amortisation (Adjusted EBITDA) of $1,483m in 2017 decreased by $65m,
or 4% from the previous year, resulting in a 34% Adjusted EBITDA margin. Adjusted EBITDA for the year excludes the impact of
the South African redundancy costs and impairments but includes the impact of the estimated provision in respect of the silicosis
class-action law suit of $46m (pre-tax: $63m). The ratio of net debt to Adjusted EBITDA at the end of December 2017 was 1.35
times compared with 1.56 times at the end of June 2017 and 1.24 times at the end of December 2016. Management has
successfully maintained financial flexibility by remaining at or below targeted leverage levels, and well below the covenant ratio of
3.5 times which applies under our revolving credit agreements.

Net debt increased marginally by 4% to $2.001bn at 31 December 2017, from $1.916bn at the end of 2016. During 2017,
AngloGold Ashanti increased its ZAR RCF facilities from R3.4bn to R5.7bn. The balance sheet remains robust, with liquidity
comprising $1,050m available on the $1.1bn US dollar RCFs at the end of December 2017, A$290m undrawn on the A$500m
Australian dollar RCF, approximately R2.95bn available from the South African RCF and other facilities and cash and cash
equivalents of $205m at the end of December 2017. The nearest bond maturities are in 2020 and 2022.

The dividends declared for the year under review of ~6 US cents per share, will result in an estimated cash outflow in March and
April 2018 of $24m. A dividend of 10 US cents per share were declared and paid in 2017. Our dividend policy is based on 10% of
free cash flow generation pre-growth capital expenditure, subject to the board’s discretion taking into consideration prevailing

market conditions, the strength of our balance sheet and our future capital commitments.

Turning to the financing facilities available, the group’s principal US dollar and Australian dollar debt facilities are listed below:

ANNUAL FINANCIAL STATEMENTS

2017

●

Fully drawn rated bonds – $1.75bn in aggregate – that mature in April 2020 ($700m: 5.375%), August 2022 ($750m: 5.125%)

and April 2040 ($300m: 6.5%);

●

$1bn syndicated revolving credit facility that matures in July 2019, which is currently $35m drawn;

●

$100m revolving credit facilities in Guinea and Tanzania that mature in August 2019, which are currently $15m drawn;

●

A$500m base rate plus 2% syndicated revolving credit facility originally earmarked for the construction of the Tropicana
project that matures in July 2019, of which A$210m remains drawn at year-end;

●

R2.5bn JIBAR plus 1.8% South African syndicated revolving credit facility that matures in December 2020, with an option to
extend by 2 years; R1.4bn JIBAR plus 1.65% South African syndicated loan facility that matures in July 2020; and R1bn
JIBAR plus 1.3% South African syndicated loan facility that matures in November 2020, with an option to extend by 2 years

–

the three facilities are currently R2.7bn drawn; and

●

R750m overnight bank lending rate South African demand facility, which is undrawn.

We remain subject to an uncertain tax environment. Across the group, we are due refunds for input tax and fuel duties for an
amount of $252m (2016: $199m; 2015: $195m), including attributable amounts of equity accounted joint ventures, which have
remained outstanding for periods longer than those provided for in the respective statutes. Considerable effort continues to be
made to reduce these outstanding amounts.

The normalised 2017 effective tax rate jumped to 38% compared to 31% in 2016. The increase in the effective tax rate year-on-
year is directly attributable to the significant losses incurred in South Africa, mainly due to large retrenchment costs and once-off
non-cash adjustments for silicosis and impairments. Furthermore, the impact of deferred tax rates in South Africa together with
the deferred tax assets not recognised, all resulted in the increase in the overall tax rate. Excluding the adverse effect of the
South African taxes, the normalised tax rate for the group for 2017 is 30%.

More detailed notes and analyses of the group’s income statement, statement of financial position and statement of cash flow for

2017 are available in the group financial statements for 2017.

LOOKING AHEAD TO 2018, THE KEY FINANCIAL AND OTHER OBJECTIVES ARE TO:

●

Maintain our focus and capital discipline to deliver competitive AISC and AIC;

●

Continue to enhance margins and cash flows with a focus on operational efficiencies and productivity through Operations
Excellence;

●

Maintain the dividend underpinned by sustainable cash generation;

●

Seek resolutions for the Tanzanian and DRC regulatory uncertainty;

Progress the implementation of the Obuasi project;

●

Execute on low capital, high return brownfields projects, while continuing to progress long term projects up the value curve;
and

●

Maintain financial flexibility and further reduce finance costs.

The guidance for 2018 is set out in the table below:

Guidance

Notes

Production (000oz)

3,325

–

3,450

Includes three months production from
Moab and Kopanang at ~30koz per
month

Costs

All-in sustaining costs ($/oz)

990

–

1,060

Total cash costs ($/oz)

770 - 830

Overheads

Corporate costs ($m)

70 - 80

Expensed exploration and study costs ($m)

115 - 125

Including equity accounted joint ventures

Capex

Total ($m)

800 - 920

Sustaining capex ($m)

600 - 670

Non-sustaining capex ($m)

200 - 250

Expenditure related to Obuasi, Siguiri
Hard Rock project, Kibali and Mponeng

Depreciation and amortisation ($m)

775

Depreciation and amortisation

–

included in equity accounted earnings

($m)

150

Earnings of associates and joint ventures

ANNUAL FINANCIAL STATEMENTS

2017

Interest and finance costs ($m)

140

Other operating expenses ($m)

Primarily related to the costs of care and
maintenance

Both production and cost estimates assume neither labour interruptions or power disruptions, nor further changes to asset
portfolio and/or operating mines and have not been reviewed by our external auditors. Other unknown or unpredictable factors
could also have material adverse effects on our future results and no assurance can be given that any expectations expressed by
AngloGold Ashanti will prove to have been correct. Please refer to the Risk Factors section in AngloGold Ashanti’s annual report

on Form 20-F for the year ended 31 December 2017, filed with the United States Securities and Exchange Commission (SEC).

Sensitivities to the above guidance are as follows:

Sensitivity*

AISC ($/oz)

Cash from operating

activities before taxes

for 2018 ($m)

10% change in the oil price

10% change in local currency

182

5% change in the gold price

204

50koz change in production

*All the sensitivities based on $1,250/oz gold price and assumptions used in the outlook guidance.

Currency and commodity assumptions

$/R exchange rate

12.79

A$/$ exchange rate

0.78

$/BRL exchange rate

3.20

$/ARS exchange rate

19.61

Oil ($/bbl)

ACKNOWLEDGEMENT

I would like to express my appreciation to our committed and diligent finance team across the group who have been proactive in
supporting the business to manage costs and capital as well as dealing with working capital and other business challenges
associated with the developing market nature of the jurisdictions that we operate in. In addition, we continue to maintain a high
standard of governance and compliance to internal controls across the organisation. The quality financial information prepared for
our stakeholders is testament to our high calibre financial team whom I applaud. Finally, I look forward to the year ahead with
enthusiasm and absolute focus on our strategic objectives with the aim of improving shareholder returns, on a sustainable basis.

Best regards

Christine Ramon

Chief Financial Officer
19 March 2018

ANNUAL FINANCIAL STATEMENTS

2017

DIRECTORS’

APPROVAL

In accordance with Section 30(3)(c) of the Companies Act, No. 71 of 2008, as amended, the annual financial statements for the
year ended 31 December 2017 were approved by the board of directors on 19 March 2018 and are signed on its behalf by:

DIRECTORS

SM Pityana

, Chairman

S Venkatakrishnan

, Chief Executive Officer

KC Ramon

, Chief Financial Officer

R Gasant

, Chairman: Audit and Risk Committee

SECRETARY’S CERTIFICATE

In terms of Section 88(2)(e) of the Companies Act, No. 71 of 2008, as amended, I certify that the company has lodged with the
Companies and Intellectual Property Commission all such returns and notices as are required of a public company in terms of the
Act, and that all such returns and notices are true, correct and up-to-date.

ME Sanz Perez

Company Secretary
Johannesburg
19 March 2018

AFFIRMATION OF FINANCIAL STATEMENTS

In accordance with Section 30(2) and 30(3) of the Companies Act, No. 71 of 2008, as amended, the annual financial statements
for AngloGold Ashanti Limited, registration number 1944/017354/06 (AngloGold Ashanti), for the year ended 31 December 2017,

have been audited by Ernst & Young Inc., the company’s in dependent external auditors, whose unqualified audit opinion can be

found under Independent Auditor’s Report, on page 30.

The financial statements have been prepared by the corporate reporting staff of AngloGold Ashanti, headed by
Meroonisha Kerber (CA(SA)); the group’s Senior Vice President: Finance. This process was supervised by

Kandimathie Christine Ramon (BCompt; BCompt (Hons); CA (SA)) , the group’s Chief Financial Officer and

Srinivasan Venkatakrishnan (BCom; ACA (ICAI)), the group’s Chief Executive Officer.

ANNUAL FINANCIAL STATEMENTS

2017

DIRECTORS’

REPORT

For the year ended 31 December 2017

NATURE OF BUSINESS

AngloGold Ashanti conducts mining operations in Africa, South America and Australia, and undertakes exploration activities in
some of these jurisdictions. At certain of its operations, AngloGold Ashanti produces uranium, silver and sulphuric acid as by-
products in the course of producing gold.

A review of the unaudited performance of the various operations is available in the operational profiles on AngloGold Ashanti’s

annual report website www.aga-reports.com.

SHAREHOLDERS HOLDING 10% OR MORE OF ANGLOGOLD ASHANTI’S ISSUED SHARE CAPITAL

As at 31 December 2017, there were no shareholders holding 10% or more of the company’s issued share capital. This does not

take cognisance of the shares held by the Bank of New York Mellon as depositary for the AngloGold Ashanti ADR programme.

SHARE CAPITAL

AUTHORISED

The authorised share capital of AngloGold Ashanti as at 31 December 2017 was made up as follows:

SA Rands

• 600,000,000 ordinary shares of 25 South African cents each

150,000,000

• 2,000,000 A redeemable preference shares of 50 South African cents each

1,000,000

• 5,000,000 B redeemable preference shares of 1 South African cent each

50,000

• 30,000,000 C redeemable preference shares of no par value

The following are the movements in the issued and unissued share capital from 1 January 2017 to 28 February 2018:

ISSUED

Ordinary shares

Number of

Shares

Value

SA Rands

Number of

Shares

Value

SA Rands

2017

2016

At 1 January

408,223,760

102,055,940

405,265,315

101,316,329

Exercise of options by participants in the AngloGold Ashanti
Share Incentive Scheme

1,830,855

457,714

2,958,445

739,611

At 31 December

(1)

410,054,615

102,513,654

408,223,760

102,055,940

At 31 December

(1)

410,054,615

102,513,654

Issued subsequent to year-end:

Exercise of options by participants in the AngloGold Ashanti
Share Incentive Scheme

71,509

17,877

At 28 February 2018

410,126,124

102,531,531

)

Share capital of $16m (2016: $16m) is translated at historical rates of exchange at the reporting dates. Refer to group financial statements

note 24.

ANNUAL FINANCIAL STATEMENTS

2017

Redeemable preference shares

The A and B redeemable preference shares, all of which are held by the wholly owned subsidiary, Eastvaal Gold Holdings
Limited, may not be transferred. The A, B and C redeemable preference shares terms and conditions carry the right to receive
dividends equivalent to the balance of after tax profits arising from income derived from mining the Moab Lease Area. The shares
are redeemable from the realisation of the assets relating to the Moab Lease Area after the cessation of mining operations in the
area. No further A and B redeemable preference shares will be issued. C redeemable preference shares which may only be
issued to AngloGold Ashanti Limited or its subsidiaries, have not been issued at 19 March 2018.

Further details of the authorised and issued shares, as well as the share premium, are given in group financial statements
note 24.

UNISSUED ORDINARY SHARES

Number of ordinary shares

2017

2016

At 1 January

191,776,240

194,734,685

Issued during the year

(1,830,855)

(2,958,445)

At 31 December

189,945,385

191,776,240

Issues subsequent to year-end

(71,509)

At 28 February 2018

189,873,876

ORDINARY SHARES UNDER THE CONTROL OF THE DIRECTORS

Pursuant to the authority granted by shareholders at the Annual General Meeting held on 16 May 2017, 5% of the shares in issue
were placed under the control of the directors to allot and issue, for such purposes and on such terms as the directors, in their
discretion, may determine. At 19 March 2018, the total number of shares placed under the control of the directors was
20,536,908. No shares were issued during 2017 by the directors in terms of this authority, which will expire at the close of the
next Annual General Meeting, unless renewed.

Shareholders will therefore be asked at the Annual General Meeting to be held on 16 May 2018, to renew this authority by placing
5% of the number of shares in issue under the control of the directors to allot and issue, for such purposes and on such terms as
the directors, at their discretion, may determine.

In terms of the Listings Requirements of the JSE, shareholders may, subject to certain conditions, authorise the directors to issue
the ordinary shares held under their control for cash other than by means of a rights offer to shareholders. To enable the directors
of the company to take advantage of favourable business opportunities which may arise for the issue of such ordinary shares for
cash, without restriction, for the benefit of the company, shareholders will be asked to consider an ordinary resolution to this effect
at the Annual General Meeting to be held on 16 May 2018.

Shareholders will also be asked to approve as a general authority, the acquisition by the company, or a subsidiary of the
company, of its own shares from its issued ordinary share capital for certain specific housekeeping reasons.

DEPOSITARY INTERESTS

American Depositary Shares

At 31 December 2017, the company had in issue, through The Bank of New York Mellon as Depositary and listed on the New
York Stock Exchange (NYSE) 159,347,405 (2016: 176,085,993), American Depositary Shares (ADSs). Each ADS is equal to one
AngloGold Ashanti ordinary share. At 28 February 2018, there were 161,129,684 ADSs in issue and listed on the NYSE.

CHESS Depositary Interests

At 31 December 2017, the company had in issue, through the Clearing House Electronic Sub-register System (CHESS), and
listed on the Australian Securities Exchange (ASX), 90,233,125 (2016: 90,030,840) CHESS Depositary Interests (CDI). At
28 February 2018

there were 90,613,195 CDI’s in issue. Every five CDIs are equivalent to one AngloGold Ashanti ordinary share

and carry the right to one vote.

ANNUAL FINANCIAL STATEMENTS

2017

Ghanaian Depositary Shares

At 31 December 2017, the company had in issue, through NTHC Limited as Depositary and listed on the Ghana Stock Exchange
(GhSE), 15,959,100 Ghanaian Depositary Shares (GhDSs) (2016: 16,125,300). The register as at 28 February 2018 remained
unchanged. Every 100 GhDSs are equivalent to one underlying AngloGold Ashanti ordinary share and carry the right to one vote.

ANGLOGOLD ASHANTI SHARE INCENTIVE SCHEME

AngloGold Ashanti operates a share incentive scheme through which Executive Directors, members of the Executive Committee
and other management groups of the company and its subsidiaries are given the opportunity to acquire shares in the company.
The intention of the incentive scheme is to ensure that the medium to long term interests of the executive and shareholders are
aligned, providing rewards to the executives and wealth creation opportunities to the shareholders when the strategic
performance drivers are achieved.

Non-Executive Directors are not eligible to participate in the share incentive scheme.

Employees participate in the share incentive scheme to the extent that they are granted options or rights to acquire shares and
accept them. All options or rights which have not been exercised within ten years from the date of grant, automatically expire.

The incentives offered by AngloGold Ashanti are reviewed periodically to ensure that they remain globally competitive, so as to
attract, reward and retain managers of the highest calibre. As a result, several types of incentives, each with their own issue and

vesting criteria, have been granted to employees. These are collectively known as the “AngloGold Ashanti Share Incentive
Scheme” or “Share Incentive Scheme”.

Although the Remuneration and Human Resources Committee has the discretion to incentivise employees through the issue of
shares, only options or awards have so far been granted.

The type and vesting criteria of the options or awards granted are:

BONUS SHARE PLAN (BSP)

The granting of awards in terms of the BSP was approved by shareholders at the Annual General Meeting held on 29 April 2005.
The Scheme has undergone a number of changes, each approved by the shareholders. Currently, each award made in respect
of the BSP entitles the holder to acquire one ordinary share at “nil” cost, provided that the participant remains in the employ of the

company at the date of vesting unless an event, such as death, retirement or redundancy occurs, which may result in a pro-rata
allocation of awards and an earlier vesting date.

The Executive Committee members receive an allocation of 150 percent of their cash bonus while all other participating
employees receive a 120 percent matching. The vesting period runs over two years with 50 percent vesting 12 months after the
date of issue and the remaining 50 percent vesting 24 months after the date of issue.

LONG TERM INCENTIVE PLAN (LTIP)

The granting of awards in terms of the LTIP was approved by shareholders at the Annual General Meeting held on 29 April 2005.
Executive directors and selected senior management are eligible for participation. Each award made in respect of the LTIP

entitles the holder to acquire one ordinary share at “nil” cost. Awards granted vest in three years from the date of grant, to the

extent that the set company performance targets, under which the awards were made, are met, and provided that the participant
remains in the employ of the company at the date of vesting, unless an event, such as death, retirement or redundancy occurs,
which may result in a pro-rata allocation of awards and an earlier vesting date. Awards for 2016 and 2017 will be cash settled in
lieu of share awards.

The table below reflects the total number of options/awards that are available for issue in terms of the Share Incentive Scheme:

2017

Options/Awards

2016

Options/Awards

At 1 January

1,252,708

1,992,078

Bonus Share Plan awards granted

(1,926,549)

(2,103,767)

Lapsed/Forfeited:

Bonus Share Plan

218,601

204,374

Long Term Incentive Plan

1,512,857

1,160,023

At 31 December

1,057,617

1,252,708

ANNUAL FINANCIAL STATEMENTS

2017

CO-INVESTMENT PLAN (CIP)

To assist executives in meeting their Minimum Shareholding Requirements (MSR’s) with effect from February 2013, they were

given the opportunity, on a voluntary basis, to participate in the Co-Investment Plan (CIP), and this has been adopted based on
the following conditions: Executives are allowed to take up to 50% of their after tax cash bonus to participate in a further matching
scheme by purchasing shares in AngloGold Ashanti, and the company will match their initial investment into the scheme at 150%,
with vesting over a two-year period in equal tranches.

DEFERRED SHARE PLAN (DSP)

On 16 May 2017, the shareholders approved the introduction of the Deferred Share Plan to replace both the BSP and LTIP with
effect from 1 January 2018. The DSP, designed with feedback from shareholders in mind, aims to better align the interests of
company management with those of shareholders by, among others: rewarding decision-making that promotes the long term
health of the business by increasing the maximum vesting period of shares from two years to a maximum vesting period of five
years, and introducing a claw-back provision; reducing the impact of uncontrollable factors, like gold price and currency
fluctuations, in determining remuneration; providing better incentive for prudent, value-adding capital allocation; capping the
number of shares that can be issued under the DSP in any given year to 1% of total shares in issue; and providing greater
incentives for excellence in the broad area of sustainability, which covers the safety, environmental, governance, community
relations and human capital disciplines.

The first awards under this scheme will be made in the 2019 calendar year for the 2018 performance year.

CHANGES IN OPTIONS AND AWARDS

In accordance with the JSE Listings Requirements and the rules of the AngloGold Ashanti Share Incentive Scheme, the changes
in options and awards granted and the ordinary shares issued as a result of the exercise of options and awards during the period
1 January 2017 to 28 February 2018 are disclosed below:

Bonus Share Plan

Long-Term

Incentive Plan

(2)

Total Share

Incentive Scheme

At 1 January 2017

4,198,285

4,435,368

8,633,653

Movement during year

–

Granted

(1)

1,926,549

–

Exercised

(1,426,554)

(404,301)

(1,830,855)

–

Lapsed/forfeited

(218,601)

(1,512,857)

(1,731,458)

At 31 December 2017

4,479,679

2,518,210

6,997,889

Subsequent to year-end

–

Exercised

(64,165)

(7,344)

(71,509)

–

Lapsed/forfeited

(19,995)

(5,593)

(25,588)

At 28 February 2018

4,395,519

2,505,273

6,900,792

(1)

BSP and LTIP awards are granted at no cost to participants.

(2)

Includes Share Retention Bonus Scheme awards.

Total shares issued on the exercise of options and awards from the inception of the scheme:

Total number of shares issued

At 1 January 2017

14,981,130

–

Exercised 2017

1,830,855

At 31 December 2017

16,811,985

Subsequent to year-end

–

Exercised January and February 2018

71,509

At 28 February 2018

16,883,494

ANNUAL FINANCIAL STATEMENTS

2017

DIVIDEND POLICY

Dividends are proposed by, and approved by the board of directors of AngloGold Ashanti, based on the company’s financial

performance. The dividend policy provides for an annual dividend to be based on 10% of the free cash flow, before growth capital
expenditure, generated by the business for that financial year. Furthermore, this is subject to the board exercising its discretion on
an annual basis, after taking into consideration the prevailing market conditions, balance sheet flexibility and future capital
commitments of the group.

Consequently, the quantum of the dividend payout is expected to be volatile as it is based on a free cash flow metric that is
subject to market conditions and is impacted by the level of funding of sustaining capital expenditure. In 2017, due to the
significant capital reinvestment that the company made at its existing operations, sustaining capital expenditure increased by 19%
to $829m when compared to the prior year. In line with the approved dividend policy, the board has applied its discretion in
adjusting the 2017 free cash flow, pre-growth capital expenditure metric for the $49m abnormal South African retrenchment costs
paid. For the year ended 31 December 2017, the directors of AngloGold Ashanti declared a gross cash dividend per ordinary
share of 70 South African cents (assuming an exchange rate of ZAR 11.6641/$, the gross dividend payable per ADS is equivalent
to 6 US cents).

The Board is satisfied that subsequent to the dividend declaration, the Company has adequate balance sheet flexibility and
sufficient funding facilities available to withstand market volatility. The continuation of the dividend reflects capital discipline and
management's commitment to improving shareholder returns.

Dematerialised shareholders on the South African share register will receive payment of their dividends electronically, as
provided for by Strate. Certificated shareholders, who have elected to receive their dividends electronically, will be paid via the

company’s electronic funds transmission service. Certificated shareholders who have not yet elected to receive dividend

payments electronically, are encouraged to mandate this method of payment for all future dividends.

WITHHOLDING TAX

Withholding tax of 20% on dividends and other distributions payable to shareholders are in effect from 1 March 2017.

BORROWINGS

The company’s borrowing powers are unlimited pursuant to the company’s Memorandum of Incorporation. As at

31 December 2017, the group’s gross borrowings totalled $2,268m (2016: $2,178m).

OTHER MATTERS

SIGNIFICANT EVENTS DURING THE YEAR UNDER REVIEW

Arbitration Proceedings against the Government of Tanzania - On 13 July 2017, AngloGold Ashanti announced that its
indirect subsidiaries, Samax Resources Limited and Geita Gold Mining Limited, took the precautionary step of safeguarding their
interests under the Mine Development Agreement (MDA), by commencing arbitration proceedings under the rules of the United
Nations Commission on International Trade Law, as clearly provided for in the MDA.

Disposal of Kopanang Mine, The West Gold Plant and Related Infrastructure – On 19 October 2017, AngloGold Ashanti

announced that it had entered into an agreement to dispose of Kopanang Mine, the West Gold Plant and related infrastructure to
Heaven-Sent SA Sunshine Investment Company Limited (“Heaven-Sent”), a Chinese capital management company

headquartered in Hong Kong.

Sale of Various Assets in the Vaal River Region, including the Moab Khotsong Mine to Harmony– On 19 October 2017,

AngloGold Ashanti announced that it had entered into a sale and purchase agreement to dispose of various assets situated in the
Vaal River region of South Africa to Harmony Gold Mining Company Limited (“Harmony”) for a cash consideration of $300m.

SIGNIFICANT EVENTS SUBSEQUENT TO YEAR-END

On 20 February 2018, the group announced the following updates:

● The declaration of the maiden Ore Reserve at Gramalote; and
● That agreement had been reached with the Government of Ghana for the redevelopment of Obuasi Gold mine in Ghana,

subject to ratification by Ghana’s parliament of the relevant fiscal and development agreements. These agreements have

been signed by the Government and ratification is scheduled during the current parliamentary sitting.

ANNUAL FINANCIAL STATEMENTS

2017

On 28 February 2018, the conditions precedent were fulfilled for the sales of Moab Khotsong and Kopanang mines and the
transactions were completed and ownership of Moab Khotsong and Kopanang mines transferred to Harmony and Heaven-Sent
respectively.

The Democratic Republic of the Congo (DRC) has recently promulgated a new mining code that makes a number of changes to

the operating environment for the DRC’s extractive industries, including those in its mining, and oil and gas sectors. On

8 March 2018, AngloGold Ashanti announced that a meeting had been held between the DRC president and mining industry
representatives to discuss the new mining code prior to its promulgation. The DRC government has agreed to continue
discussions with the mining industry representatives post the promulgation of the new mining code regarding issues existing in
the current agreement and the implementation of the new mining code. AngloGold Ashanti is in full support of Randgold
Resources, our partner and the operator in the Kibali joint venture, in its continued engagement with the DRC government.

MATERIAL CHANGE

There has been no material change in the financial results or trading position of the AngloGold Ashanti group since the
publication of the report for the six months and year ended 31 December 2017 on 20 February 2018 and the date of this report.
The results for the year ended 31 December 2017 were audited by Ernst & Young Inc., who issued an unqualified audit report on
19 March 2018.

ANNUAL GENERAL MEETINGS

At the 73

Annual General Meeting held on Tuesday, 16 May 2017, shareholders passed resolutions relating to the:

•

Re-election of Messrs Pityana and Ruston and Ms Richter as non-Executive Directors;

•

Election of Mrs SV Zilwa as a non-Executive Director;

•

Reappointment and appointment of the Audit and Risk Committee members being, Messrs Gasant, Kirkwood, Ruston and
Garner, Ms Richter and Mrs Zilwa;

•

Re-appointment of Ernst & Young Inc. as External Auditors of the company;

•

General authority to directors to allot and issue ordinary shares;

•

Non-binding advisory endorsement of the AngloGold Ashanti remuneration policy;

•

Remuneration of non-executive directors, which remains unchanged from the previous year;

•

General authority to acquire the company’s own shares;

•

Approval of the DSP;

•

Authority to issue ordinary shares pursuant to the DSP;

•

General authority to directors to issue for cash, those ordinary shares which the directors are authorised to allot and issue;

•

General authority to provide financial assistance in terms of sections 44 and 45 of the Companies Act;

•

Amendment of the company’s Memorandum of Incorporation; and

•

Directors’ authority to implement special and ordinary resolutions.

Notice of the 74th Annual General Meeting to be held in the Auditorium, 76 Rahima Moosa Street, Newtown, Johannesburg at
11:00 (South African time) on 16 May 2018, is printed as a separate document and distributed to shareholders in accordance with
the Companies Act.

DIRECTORATE AND SECRETARY

During the period 1 January 2017 to 31 December 2017, Sindiswa Zilwa was appointed as an Independent Non-Executive
Director with effect from 1 April 2017 and Professor Wiseman Nkuhlu retired as a non-executive director from the board on 16
May 2017.

Company Secretary

There was no change to the office of the Company Secretary during 2017. The name, business and postal address of the
Company Secretary are set out under Administrative Information on page 136.

Directors’ and Prescribed Officers’ interests in AngloGold Ashanti shares

The interests of Directors, Prescribed Officers and their associates in the ordinary shares of the company at 31 December 2017,

individually did not exceed 1% of the company’s issued ordinary share capital and are disclosed in note 32 of the group financial

statements.

Details of service contracts of Directors and Prescribed Officers

In accordance with Section 30(4)(e) of the Companies Act the salient features of the service contracts of Directors and Prescribed
Officers have been disclosed in the Remuneration Report, which is included in the Integrated Report 2017.

ANNUAL FINANCIAL STATEMENTS

2017

ANNUAL FINANCIAL STATEMENTS

2017

ANNUAL FINANCIAL STATEMENTS

The financial statements set out fully the financial position, results of operations and cash flows of the group and the company for
the financial year ended 31 December 2017.

The directors of AngloGold Ashanti are responsible for the maintenance of adequate accounting records and the preparation of
the annual financial statements and related information in a manner that fairly presents the state of affairs of the company, in
conformity with the Companies Act and in terms of the JSE Listings Requirements.

The directors are also responsible for the maintenance of effective systems of internal control which are based on established
organisational structures and procedures. These systems are designed to provide reasonable assurance as to the reliability of the
annual financial statements, and to prevent and detect material misstatement and loss.

In preparing the annual financial statements, the group has complied with International Financial Reporting Standards (IFRS) and
used appropriate accounting policies supported by pragmatic judgements and estimates.

AngloGold Ashanti, through its Executive Committee, reviews its short-, medium- and long-term funding, treasury and liquidity
requirements and positions monthly. The board of directors also reviews these on a quarterly basis at its meetings.

Cash and cash equivalents, at 31 December 2017 amounted to $205m (2016: $215m), and together with cash budgeted to be

generated from operations in 2018 and the net incremental borrowing facilities available, are in management’s view, adequate to

fund operating, mine development, capital expenditure and financing obligations as they fall due for at least the next 12 months.

Taking these factors into account, the directors of AngloGold Ashanti have formed the judgement that, at the time of approving
the financial statements for the year ended 31 December 2017, it is appropriate to prepare these financial statements on a going
concern basis.

Based on the results of a formal documented review of the company’s system of internal controls and risk management, covering

both the adequacy in design and effectiveness in implementation, performed by the internal audit function during the year 2017:

•

information and explanations provided by line management;

•

discussions held with the external auditors on the results of the year-end audit; and

•

the assessment by the Audit and Risk Committee,

the board has concluded that nothing has come to its attention that caused it to believe that the company’s system of interna

controls and risk management are not effective and that the internal financial controls do not form a sound basis for the
preparation of reliable financial statements.

The directors are of the opinion that these financial statements fairly present the financial position of the company and group at
31 December 2017 and the results of their operations, changes in equity and cash flow information for the year then ended in
accordance with IFRS.

The external auditor, Ernst & Young Inc., is responsible for independently auditing and reporting on the financial statements in
conformity with International Standards on Auditing and the Companies Act of South Africa. Their unqualified opinion on these
financial statements appears in the Independent Auditor’s Report, on page 30 of this report.

The company will file a set of financial statements in accordance with IFRS in its annual report on Form 20-F as must be filed with
the US Securities and Exchange Commission (SEC) by no later than 30 April 2018. Copies of the annual report on Form 20-F will

be made available once the filing has been made, on request, from the Bank of New York Mellon, or from the company’s

corporate office detailed in the section Administrative Information. The SEC issued guidance in March 2017 that requires foreign
private issuers to tag their financial statements in Form 20-F and Form 6-K filings in terms of XBRL.

INVESTMENTS

Particulars of the group’s principal subsidiaries and operating entities are presented in this report on page 131.

ANNUAL FINANCIAL STATEMENTS

2017

INDEPENDENT AUDITOR’S REPORT

The Board of Directors and Shareholders of AngloGold Ashanti Limited

REPORT ON THE AUDIT OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

OPINION

We have audited the consolidated and separate financial statements of AngloGold Ashanti Limited set out on pages 35 to 132,
which comprise the consolidated and separate statements of financial position as at 31 December 2017, and the consolidated
and separate income statement, statement of comprehensive income, changes in equity and cash flows for the year then ended,
and notes to the consolidated and separate financial statements, including a summary of significant accounting policies.

In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and
separate financial position of the Company as at 31 December 2017, and its consolidated and separate financial performance
and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards
(IFRS) and the requirements of the Companies Act of South Africa.

BASIS FOR OPINION

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial

Statements section of our report. We are independent of the Company in accordance with the Independent Regulatory Board for
Auditors Code of Professional Conduct for Registered Auditors (IRBA Code), the International Ethics Standards Board for
Accountants Code of Ethics for Professional Accountants (IESBA Code) and other independence requirements applicable to
performing the audit of the Company. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code,
IESBA Code, and in accordance with other ethical requirements applicable to performing the audit of the Company. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated
and separate financial statements of the current period. These matters were addressed in the context of our audit of the
consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that
context.

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Consolidated and Separate

Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance
of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The
results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit
opinion on the accompanying financial statements.

Sale of Moab Khotsong and Kopanang mines
(consolidated and separate KAM)

The disposal of the Moab Khotsong and Kopanang mines,
and some other associated assets, represent a significant

change to the composition of the Company’s South African

operations, particularly the Vaal River operations.

We considered the disposal of these mining operations to
be a key audit matter because the carrying values of these
assets and liabilities are material and the identification and
reclassification of these assets and liabilities as held for

Through discussions with management and reviews of minutes

of meetings, we assessed management’s plans to dispose of

the Moab Khotsong and Kopanang mines.

We reviewed the executed sales and purchase agreements with
the respective counterparties and verified that these agreements
were signed by persons with the necessary authority to do so.
We confirmed that the assets and liabilities that were
reclassified as held for sale, were consistent with those listed in

102 Rivonia Road

Sandton

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Ernst & Young Incorporated

Co. Reg. No. 2005/002308/21

Tel: +27 (0) 11 772 3000

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Docex 123 Randburg

ey.com

ANNUAL FINANCIAL STATEMENTS

2017

sale is complex, particularly since all of the mining
operations in South Africa are held within a single legal
entity. The disposals will also significantly impact the
strategic and operational activities of the remaining South
African operations, and the account balances and related
disclosures in the Company’s consolidated and separate

financial statements will be significantly impacted.

At 31 December 2017, the Company classified the disposal
groups as held for sale. These assets and liabilities
classified as held for sale amounted to $348m and $126m,
respectively. An impairment charge of $149m was
recorded to reduce the carrying amount of the Moab

Khotsong mine’s net assets to the lower of fair value less

costs to sell and the carrying amount.

The consolidated disclosures are included in Note 23 and
36, and separate disclosures are included in Note 17 and
Note 30.

the executed agreements.
For both the Kopanang and Moab Khotsong mines, we obtained

management’s calculation of fair value less costs to sell, which

we compared to the carrying values of the cash generating
units. We furthermore compared the inputs to the calculation to
the sales and purchase agreement. Since the purchase
consideration of the disposal of the Moab Khotsong mine is
denominated in US dollars, we also considered the
appropriateness of the foreign exchange rates used.

We considered the impact of current and deferred taxes as it
relates to the disposal and reclassification of the assets and
liabilities.

We considered the recoverability of the remaining cash
generating units in the South African operations.

We performed walkthrough and control testing procedures

relating to management’s processes and controls in place to

approve and account for the transactions.

We reviewed the disclosures, including post-balance sheet
events, made by management and tested whether these met
the requirements of IFRS 5. We assessed whether there were
any changes to the plan of sale as at 31 December 2017.

Recoverability of asset carrying values
(Consolidated and Separate KAM)

During the current year, impairment assessments were
performed for the cash generating units where indicators of
impairment were identified, or where goodwill had been
allocated to.

Determining the recoverable amount of mining assets is
dependent on a number of assumptions that require
estimation and judgement, which include economic mineral
reserves and resources, associated life of mine plans, the
weighted average cost of capital, inflation forecasts, future
gold prices and exchange rates. These areas required
additional audit effort and executive involvement due to
their technical nature.

The consolidated and separate disclosures are included in
the Consolidated Note 14 and Separate Note 9,
respectively.

We evaluated the appropriateness of management’s processes,

and reviewed other supporting information, to identify cash
generating units and determine whether impairment indicators
existed for the respective cash generating units. We furthermore

also reviewed management’s methods, processes and controls

in place to determine the carrying values, and the associated
recoverable amounts, of each cash generating units.

We compared the mine plans, including the mineral reserves
and resources quantities to the plans that were approved by the
directors

, and performed audit work on management’s

processes and controls related to the declaration of mineral
reserves and resources that were included these business
plans.

Our audit procedures included involving experts to critically

assess management’s assumptions in their valuation models,

including weighted average cost of capital, inflation forecasts,
future gold prices and exchange rates. We also considered the
appropriateness and reasonability of key operational and cash
flow assumptions, including production, resultant revenue,
capital expenditure and cost movements.

We considered the appropriateness of the related disclosures in
the consolidated and separate financial statements.

Tax exposures (Consolidated)

The Company is party to direct and indirect tax exposures
from tax authorities in several countries in which it
operates. The tax exposures in South America amount to

$201m. Management’s assessment of these exposures

has been disclosed in the consolidated financial
statements in the Contingencies Note 33. In South Africa
and Continental Africa the majority of the direct tax
exposures are considered remote and are therefore not
disclosed. Indirect tax positions have been provided for

We focused our audit effort on the significant direct and indirect
tax exposures in South America, South Africa and Continental
Africa.

We inspected relevant communications with tax authorities. With
the assistance of our tax experts, our audit procedures included
assessing the nature and amount of the tax exposures and the

reasonableness of management’s and their expert’s conclusions

on whether exposures are probable, contingent or remote.

ANNUAL FINANCIAL STATEMENTS

2017

where appropriate.

The tax exposures are subject to judgement both in
relation to interpretation of local tax regulations and the
recognition and measurement of any potential provision
against such exposures. Due to the aforementioned factors
greater audit effort and executive involvement was
required.

Where exposures are assessed as probable, we evaluated the
reasonableness of the amounts provided with respect to those
exposures.

We considered the appropriateness of the related disclosure in
the consolidated financial statements.

Environment rehabilitation obligations (consolidated
and separate KAM)

At 31 December 2017, the environmental rehabilitation
provision amounted to $713m ($695m as non-current
liabilities and $18m as current liabilities) in the consolidated
financial statements, and R803m in the separate financial
statements.

We focussed on this area due to the significance of the
provision in the consolidated and separate financial
statements as well as the judgemental nature of the
provision. The determination of the provision is based on,
inter alia, judgements and estimates of current damage
caused, nature, timing and amount of future costs to be
incurred to rehabilitate the mine sites, estimates of future
inflation, exchange rates and discount rates. Influenced by
ongoing the mining activity and the annual revisions to
future mine plans, the significant judgements and
estimates relating to these obligations are revised each
year.

The consolidated and separate disclosures are included in
Consolidated Note 26 and Separate Note 20
Environmental rehabilitation and other provisions,
respectively.

We performed walkthrough and control testing procedures

relating to management’s processes and controls in place to

approve and accurately determine the provisions raised.

With the assistance of our environmental and valuation experts,
our audit procedures included the assessment of the

reasonability of management’s macro

-economic assumptions in

their rehabilitation models. The most significant of these
assumptions were the risk free interest rates, expected inflation
and exchange rates as these have the largest quantitative effect
on the provision balance.

We tested the mathematical accuracy of the valuation models.

We compared the timing of the expected cash flows with
reference to the expected life of mine plans at the respective
regions. We compared the current year cash flow assumptions
to those of prior year, and tested the reasonableness of

management’s explanations where these have changed or

deviated. We tested the reasonableness of the cost rates
applied with reference to publicly available information as well
as recent rehabilitation activities. We inquired from operational
management whether additional environmental disturbance
occurred that will require additional rehabilitation in future, and
we corroborated this understanding. We also assessed the
integrity of the financial rehabilitation models. We read the

reports prepared by management’s internal experts and external

experts, where these had been engaged by management, to
support the provision.

We considered the appropriateness of the related disclosure in
the consolidated and separate financial statements.

OTHER INFORMATION

The directors are responsible for the other information. The other information comprises the Audit and Risk Committee –

Chairman’s Letter, the Chief Financial Officer’s Review, the Company Secretary’s Certificate and the Directors’ Report in the
Annual Financial Statement as required by the Companies Act of South Africa, as well as the directors’ approval and affirmation

of financial statements. It also includes the Integrated Report and the Reserve and Resource Statement which we obtained prior
to the date of this report. Other information does not include the consolidated and separate financial statements and our auditor’s

report thereon.

Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express
an audit opinion or any form of assurance conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, we conclude

that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this
regard.

ANNUAL FINANCIAL STATEMENTS

2017

When we read the Annual Financial Statements, if we conclude that there is a material misstatement therein, we are required to
communicate the matter to those charged with governance.

RESPONSIBILITIES OF THE DIRECTORS FOR THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

The directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in
accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa, and for
such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial
statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and separate financial statements, the directors are responsible for assessing the Company’s ability

to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but
to do so.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole

are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these consolidated and separate financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout
the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to

fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related

disclosures made by the directors.

Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and based on the audit

evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
Company

’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw

attention in our auditor’s report to the related disclosures in the consolidated and separate financial statements or, if such

disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of

our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the

disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the

Company to express an opinion on the consolidated and separate financial statements. We are responsible for the direction,
supervision and performance of the Company audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independenc e,
and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the
consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these

matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare

circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.

ANNUAL FINANCIAL STATEMENTS

2017

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In terms of the IRBA Rule published in Government Gazette Number 39475, dated 04 December 2015, we report that Ernst &
Young Inc., and its predecessor firm, has been the auditor of AngloGold Ashanti Limited for seventy-four years. Ernst & Young
Inc. was appointed as auditor of Vaal Reefs Exploration and Mining Company Limited in 1944. In 1998 all of Anglo American’s

other individually listed gold mines, which were not audited by Ernst & Young Inc., or its predecessor firm, were merged into Vaal
Reefs Exploration and Mining Company Limited. Vaal Reefs Exploration and Mining Company Limited was renamed AngloGold
Limited in 1998, and in 2004 to AngloGold Ashanti Limited. Ernst & Young Inc. was retained as auditor of AngloGold Limited (and
AngloGold Ashanti Limited) and has been the auditor of the expanded Company for nineteen years. We confirm that we are
independent in accordance with the Independent Regulatory Board for Auditors Code of Professional Conduct for Registered
Auditors and other independence requirements applicable to the independent audit of AngloGold Ashanti Limited.

Ernst & Young Inc.
Ernest Adriaan Lodewyk Botha - Director
Chartered Accountant (CA)
Registered Auditor
Johannesburg, South Africa
19 March 2018

ANNUAL FINANCIAL STATEMENTS

2017

GROUP

– INCOME STATEMENT

For the year ended 31 December

US dollar millions

Notes

2017

2016

2015

Revenue

4,543

4,254

4,174

Gold income

2,3

4,356

4,085

4,015

Cost of sales

(3,582)

(3,263)

(3,294)

Gain (loss) on non-hedge derivatives and other commodity contracts

(7)

Gross profit (loss)

784

841

714

Corporate administration, marketing and other expenses

(64)

(61)

(78)

Exploration and evaluation costs

(114)

(133)

(132)

Other operating expenses

(88)

(110)

(96)

Special items

(438)

(42)

(71)

Operating profit (loss)

495

337

Interest received

Exchange gain (loss)

(11)

(88)

(17)

Finance costs and unwinding of obligations

(169)

(180)

(245)

Fair value adjustment on issued bonds

Share of associates and joint ventures' profit (loss)

Profit (loss) before taxation

(63)

269

257

Taxation

(108)

(189)

(211)

Profit (loss) after taxation from continuing operations

(171)

Discontinued operations

Profit (loss) from discontinued operations

(116)

Profit (loss) for the year

(171)

(70)

Allocated as follows:

Equity shareholders

- Continuing operations

(191)

- Discontinued operations

(116)

Non-controlling interests

- Continuing operations

(171)

(70)

Basic earnings (loss) per ordinary share (cents)

Earnings (loss) per ordinary share from continuing operations

(46)

Earnings (loss) per ordinary share from discontinued operations

(28)

Basic earnings (loss) per ordinary share

(46)

(20)

Diluted earnings (loss) per ordinary share (cents)

Earnings (loss) per ordinary share from continuing operations

(46)

Earnings (loss) per ordinary share from discontinued operations

(28)

Diluted earnings (loss) per ordinary share

(46)

(20)

ANNUAL FINANCIAL STATEMENTS

2017

GROUP

– STATEMENT OF COMPREHENSIVE

INCOME

For the year ended 31 December

US dollar millions

2017

2016

2015

Profit (loss) for the year

(171)

(70)

Items that will be reclassified subsequently to profit or loss:

Exchange differences on translation of foreign operations

123

180

(371)

Share of associates and joint ventures' other comprehensive
income

Net gain (loss) on available-for-sale financial assets

(14)

Release on impairment of available-for-sale financial assets

Release on disposal of available-for-sale financial assets

(6)

(2)

(3)

Deferred taxation thereon

(2)

(7)

Items that will not be reclassified subsequently to profit or
loss:

Actuarial gain (loss) recognised

(2)

Deferred taxation thereon

(2)

(3)

(2)

Other comprehensive income (loss) for the year, net of tax

154

187

(363)

Total comprehensive income (loss) for the year, net of tax

(17)

267

(433)

Allocated as follows:

Equity shareholders

- Continuing operations

(37)

250

(332)

- Discontinued operations

(116)

Non-controlling interests

- Continuing operations

(17)

267

(433)

ANNUAL FINANCIAL STATEMENTS

2017

GROUP

– STATEMENT OF FINANCIAL POSITION

As at 31 December

US dollar millions

Notes

2017

2016

2015

ASSETS

Non-current assets

Tangible assets

3,742

4,111

4,058

Intangible assets

138

145

161

Investments in associates and joint ventures

1,507

1,448

1,465

Other investments

131

125

Inventories

100

Trade, other receivables and other assets

Deferred taxation

Cash restricted for use

Other non-current assets

5,726

5,987

5,934

Current assets

Other investments

Inventories

683

672

646

Trade, other receivables and other assets

222

255

196

Cash restricted for use

Cash and cash equivalents

205

215

484

1,145

1,166

1,350

Non-current assets held for sale

348

1,493

1,166

1,350

Total assets

7,219

7,153

7,284

EQUITY AND LIABILITIES

Share capital and premium

7,134

7,108

7,066

Accumulated losses and other reserves

(4,471)

(4,393)

(4,636)

Shareholders' equity

2,663

2,715

2,430

Non-controlling interests

Total equity

2,704

2,754

2,467

Non-current liabilities

Borrowings

2,230

2,144

2,637

Environmental rehabilitation and other provisions

942

877

847

Provision for pension and post-retirement benefits

122

118

107

Trade, other payables and deferred income

Deferred taxation

363

496

514

3,660

3,639

4,110

Current liabilities

Borrowings

100

Trade, other payables and deferred income

638

615

516

Taxation

111

729

760

707

Non-current liabilities held for sale

126

855

760

707

Total liabilities

4,515

4,399

4,817

Total equity and liabilities

7,219

7,153

7,284

ANNUAL FINANCIAL STATEMENTS

2017

GROUP

– STATEMENT OF CASH FLOWS

For the year ended 31 December

US dollar millions

Notes

2017

2016

2015

Cash flows from operating activities

Receipts from customers

4,534

4,231

4,154

Payments to suppliers and employees

(3,383)

(2,929)

(2,904)

Cash generated from operations

1,151

1,302

1,250

Dividends received from joint ventures

Taxation refund

Taxation paid

(174)

(165)

(184)

Net cash inflow (outflow) from operating activities from
continuing operations

997

1,186

1,144

Net cash inflow (outflow) from operating activities from discontinued
operations

(5)

Net cash inflow (outflow) from operating activities

997

1,186

1,139

Cash flows from investing activities

Capital expenditure

- project capital

(156)

(93)

(105)

- stay-in-business capital

(673)

(613)

(559)

Expenditure on intangible assets

(1)

(5)

(3)

Proceeds from disposal of tangible assets

Other investments acquired

(91)

(73)

(86)

Proceeds from disposal of other investments

Investments in associates and joint ventures

(27)

(11)

Proceeds from disposal of associates and joint ventures

Loans advanced to associates and joint ventures

(6)

(4)

(5)

Loans repaid by associates and joint ventures

Proceeds from disposal of business and subsidiary

819

Costs on disposal of business

(7)

Cash balances in assets disposed

(2)

Decrease (increase) in cash restricted for use

(8)

(17)

Interest received

Net cash inflow (outflow) from investing activities from
continuing operations

(862)

(702)

139

Net cash inflow (outflow) from investing activities from discontinued
operations

(59)

Net cash inflow (outflow) from investing activities

(862)

(702)

Cash flows from financing activities

Proceeds from borrowings

815

787

421

Repayment of borrowings

(767)

(1,333)

(1,288)

Finance costs paid

(138)

(172)

(251)

Bond settlement premium, RCF and bond transaction costs

(30)

(61)

Dividends paid

(58)

(15)

(5)

Net cash inflow (outflow) from financing activities from
continuing operations

(148)

(763)

(1,184)

Net cash inflow (outflow) from financing activities from discontinued
operations

(2)

Net cash inflow (outflow) from financing activities

(148)

(763)

(1,186)

Net increase (decrease) in cash and cash equivalents

(13)

(279)

Translation

(17)

Cash and cash equivalents at beginning of year

215

484

468

Cash and cash equivalents at end of year

205

215

484

ANNUAL FINANCIAL STATEMENTS

2017

GROUP

– STATEMENT OF CHANGES IN EQUITY

Equity holders of the parent

US dollar millions

Share

capital

and

premium

Other

capital

reserves

(1)

Retained
earnings

(Accumulated

losses)

(2)

Cash flow

hedge

reserve

(3)

Available-

for-sale

reserve

(4)

Actuarial

gains

(losses)

Foreign

currency

translation

reserve

Total

Non-

controlling

interests

Total

equity

Balance at 31 December 2014

7,041

132

(3,109)

(1)

(40)

(1,195)

2,845

2,871

Profit (loss) for the year

(85)

(70)

Other comprehensive income (loss)

(7)

(371)

(363)

Total comprehensive income (loss)

(85)

(7)

(371)

(448)

(433)

Shares issued

Share-based payment for share awards net
of exercised

Dividends of subsidiaries

(4)

Translation

(24)

(3)

Balance at 31 December 2015

7,066

117

(3,174)

(1)

(19)

(1,566)

2,430

2,467

Profit (loss) for the year

Other comprehensive income (loss)

(2)

180

187

Total comprehensive income (loss)

(2)

180

250

267

Shares issued

Share-based payment for share awards net
of exercised

(7)

Dividends of subsidiaries

(15)

Transfer to reserves

(2)

Translation

(6)

(2)

Balance at 31 December 2016

7,108

117

(3,119)

(1)

(21)

(1,386)

2,715

2,754

Profit (loss) for the year

(191)

(171)

Other comprehensive income (loss)

123

154

Total comprehensive income (loss)

(191)

123

(37)

(17)

Shares issued

Share-based payment for share awards net
of exercised

(1)

Dividends paid (note 13)

(39)

Dividends of subsidiaries

(19)

Translation

(10)

(1)

Balance at 31 December 2017

7,134

125

(3,359)

(1)

(16)

(1,263)

2,663

2,704

(1)

Other capital reserves include a surplus on disposal of company shares held by companies prior to the formation of AngloGold Ashanti Limited of $11m (2016: $10m;

2015: $9m), surplus on equity transaction of joint venture of $36m (2016: $36m; 2015: $36m), equity items for share-based payments of $75m (2016: $68m; 2015: $69m) and

other reserves.

(2)

Included in accumulated losses are retained earnings totalling $287m (2016: $250m; 2015: $210m) arising at the equity accounted investments and certain subsidiaries which

may not be remitted without third party consent.

(3)

Cash flow hedge reserve represents the effective portion of fair value gains or losses in respect of cash flow hedges that expired in prior periods. The cash flow hedge reserve

shall remain in equity and will unwind over the life of Serra Grande mine.

(4)

Available-for-sale reserve represents fair value gains or losses on available-for-sale financial assets.

ANNUAL FINANCIAL STATEMENTS

2017

GROUP – NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

1 ACCOUNTING POLICIES

STATEMENT OF COMPLIANCE

The consolidated and company financial statements are prepared in compliance with International Financial Reporting
Standards (IFRS) and Interpretations of those standards, as issued by the International Accounting Standards Board (IASB)
in the English language, the South African Institute of Chartered Accountants Financial Reporting Guides as issued by the
Accounting Practices Committee, Financial Reporting Pronouncements as issued by Financial Reporting Standards
Council, JSE Listings Requirements and in the manner required by the South African Companies Act, 2008.

NEW STANDARDS AND INTERPRETATIONS ISSUED

The financial statements have been drawn up on the basis of accounting standards, interpretations and amendments
effective at the beginning of the accounting period on 1 January 2017. The adoption of the new standards, interpretations
and amendments effective from 1 January 2017 had no material impact on the group.

AngloGold Ashanti assesses the significance of new standards, interpretations and amendments to standards in issue that

are not yet adopted but are likely to affect the financial reporting in future years. We have identified that IFRS 15 “Revenue

from Contracts with Customers” and IFRS 9 “Financial Instruments”, both of which have an effective date of 1 January

2018, are likely to affect future financial reporting.

IFRS 15 Revenue
Management has assessed the potential impact of IFRS 15 on the financial statements of the group and concluded that the
group does not sell product based on multiple-element arrangements and it does not sell product on a provisional or
variable pricing basis and as such the new standard does not have a significant impact on the timing or amount of the

group’s revenue recognition. However, the adoption of IFRS 15 will result in the presentation of by-product revenue in

Revenue from product sales where previously by-product revenue was included in cost of sales. Revenue from product
sales includes gold income and by-product revenue. This change in classification results in a corresponding increase in
costs of sales, and therefore will not have an impact on previously reported gross profit.

As currently reported:

US dollar millions

2017

2016

2015

Revenue

4,543

4,254

4,174

Gold income

4,356

4,085

4,015

Cost of sales

(3,582)

(3,263)

(3,294)

Gain (loss) on non-hedge derivatives and other commodity contracts

(7)

Gross profit

784

841

714

Gross profit %

18.00%

20.59%

17.78%

By-products revenue for the years ended 2017, 2016 and 2015 ($154m, $138m and $127m respectively) is included in the
Revenue line, but is offset and thus reduces cost of sales in the detailed income statement.

On adoption of IFRS 15, AngloGold Ashanti will disclose revenue from all product sales, including by-products sales in
Revenue from product sales in the detailed income statement. Accordingly, the detailed income statement would be
restated for the effects of adopting IFRS 15 as follows:

US dollar millions

2017

2016

2015

Revenue

4,543

4,254

4,174

Revenue from product sales

4,510

4,223

4,142

Cost of sales

(3,736)

(3,401)

(3,421)

Gain (loss) on non-hedge derivatives and other commodity contracts

(7)

Gross profit

784

841

714

Gross profit %

17.38%

19.91%

17.24%

ANNUAL FINANCIAL STATEMENTS

2017

AngloGold Ashanti intends to apply IFRS 15 retrospectively to each prior reporting period presented in accordance with
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

IFRS 9 Financial Instruments
The group’s financial assets include debt instruments (held to maturity bonds and negotiable certificates of deposit), cash

restricted for use and cash and cash equivalents which will be subject to IFRS 9 expected credit loss model as they are to
be carried at amortised cost. The accounting policy for listed equity investments will depend on the nature of the listed
investment. Listed equity investments which are held to meet rehabilitation liabilities in future will be classified as fair value
through profit and loss. Listed equity investments held for other purposes will be classified as fair value through other
comprehensive income. Financial liabilities are currently carried at amortised cost with no requirements to change their
recognition or presentation under IFRS 9. We have evaluated the possible impact of the adoption of IFRS 9 including the
expected credit loss model and we do not expect the adoption to have a significant impact on total assets, total liabilities or
the results of the group.

IFRS 16 Leases
In addition, IFRS 16 Leases, with an effective date of 1 January 2019, is likely to affect future financial reporting and
management is still in the process of assessing all of the potential consequences arising out of the adoption of this
standard. With the removal of the operating lease classification, leases that are within the scope of IFRS 16 will result in
increases in assets and liabilities. We expect a likely increase in the depreciation expense and also an increase in cash
flows from operating activities as the lease payments will be recorded as financing outflows in our cash flow statement.
Management expects that the mining and drilling contracts which are not classified as finance leases under the current
accounting standards (IAS 17 and IFRIC 4), will potentially have the most impact on the group’s results on adoption of IFRS

16.

The significant accounting principles applied in the presentation of the group and company annual financial statements are

set out below. The accounting policies adopted are detailed in Annexure A: “Summary of significant accounting policies”.

1.1 BASIS OF PREPARATION

The financial statements are prepared according to the historical cost convention, except for the revaluation of certain

financial instruments to fair value. The group’s accounting policies as set out below are consistent in all material respects

with those applied in the previous year.

The group financial statements are presented in US dollars.

Based on materiality, certain comparatives in the notes have been aggregated and comparatives have been restated to
accord with current year disclosures.

The group financial statements incorporate the financial statements of the company, its subsidiaries and its interests in joint
ventures and associates. The financial statements of all material subsidiaries, the Environmental Rehabilitation Trust Fund,
joint ventures and associates, are prepared for the same reporting period as the holding company, using the same
accounting policies.

Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity
when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. Control would generally exist where the group owns more than 50% of the voting
rights, unless the group and other investors collectively control the entity where they must act together to direct the relevant
activities. In such cases, as no investor individually controls the entity the investment is accounted for as an equity method
investment or a joint operation. Subsidiaries are fully consolidated from the date on which control is transferred to the
group. They are de-consolidated from the date on which control ceases. The group re-assesses whether or not it controls
an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Disclosures for non-controlling interests are assessed by reference to consolidated non-controlling interest.

Intra-group transactions, balances and unrealised gains and losses on transactions between group companies, including
any resulting tax effect are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred.

Subsidiaries are accounted for at cost and are adjusted for impairments, where appropriate, in the company financial
statements.

ANNUAL FINANCIAL STATEMENTS

2017

1.2 SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES

USE OF ESTIMATES

The preparation of the financial statements requires the group’s management to make estimates and assumptions that

affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses during the reporting period. The determination of
estimates requires the exercise of judgement based on various assumptions and other factors such as historical
experience, current and expected economic conditions, and in some cases actuarial techniques. Actual results could differ
from those estimates.

The more significant areas requiring the use of management estimates and assumptions relate to Ore Reserve that are the
basis of future cash flow estimates and unit-of-production depreciation, depletion and amortisation calculations;
environmental, reclamation and closure obligations; asset impairments/reversals (including impairments of goodwill); and
write-downs of inventory to net realisable value. Other estimates include employee benefit liabilities and unrecognised tax
positions.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.

The judgements that management has applied in the application of accounting policies, and the estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are discussed below.

Carrying value of tangible assets

The majority of mining assets are amortised using the units-of-production method where the mine operating plan calls for
production from a well-defined proved and probable Ore Reserve.

For other tangible assets, the straight-line method is applied over the estimated useful life of the asset which does not
exceed the estimated mine life based on proved and probable Ore Reserve as the useful lives of these assets are
considered to be limited to the life of the relevant mine.

The calculation of the units-of-production rate of amortisation could be impacted to the extent that actual production in the
future is different from current forecast production based on proved and probable Ore Reserve. This would generally arise
when there are significant changes in any of the factors or assumptions used in estimating Ore Reserve.

These factors could include:

•

changes in proved and probable Ore Reserve;

•

the grade of Ore Reserve may vary significantly from time to time;

•

differences between actual commodity prices and commodity price assumptions;

•

unforeseen operational issues at mine sites; and

•

changes in capital, operating, mining, processing and reclamation costs, discount rates and foreign exchange rates.

Changes in proved and probable Ore Reserve could similarly impact the useful lives of assets amortised on the straight-line
method, where those lives are limited to the life of the mine.

The group has a number of surface mining operations that are in the production phase for which production stripping costs
are incurred. The benefits that accrue to the group as a result of incurring production stripping costs include (a) ore that can
be used to produce inventory and (b) improved access to further quantities of material that will be mined in future periods.

The production stripping costs relating to improved access to further quantities of material in future periods are capitalised
as a stripping activity asset, if and only if, all of the following are met:

•

It is probable that the future economic benefit (improved access to the orebody) associated with the stripping activity will
flow to the group;

•

The group can identify the component of the orebody for which access has been improved; and

•

The costs relating to the stripping activity associated with that component or components can be measured reliably.

Components of the various orebodies at the operations of the group are determined based on the geological areas
identified for each of the orebodies and are reflected in the Ore Reserve reporting of the group. In determining whether any
production stripping costs should be capitalised as a stripping activity asset, the group uses three operational guidance
measures; two of which relate to production measures, while the third relates to an average stripping ratio measure.

ANNUAL FINANCIAL STATEMENTS

2017

Once determined that any portion of the production stripping costs should be capitalised, the group determines the amount
of the production stripping costs that should be capitalised with reference to the average mine costs per tonne of the
component and the actual waste tonnes that should be deferred. Stripping activity assets are amortised on the units-of-
production method based on the Ore Reserve of the component or components of the orebody to which these assets relate.

This accounting treatment is consistent with that for stripping costs incurred during the development phase of a pit, before
production commences, except that stripping costs incurred during the development phase of a pit, before production
commences, are amortised on the units-of-production method based on the Ore Reserve of the pit.

Deferred stripping costs are included in ‘Mine development costs’, within tangible assets. These costs form part of the total

investment in the relevant cash-generating unit, which is reviewed for impairment if events or a change in circumstances
indicate that the carrying value may not be recoverable. Amortisation of stripping activity assets is included in operating
costs.

The group reviews and tests the carrying value of tangible assets when events or changes in circumstances indicate that
the carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are
largely independent of cash flows of other assets, which is generally at the individual mine level. If there are indications that
impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected
future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertain and could
materially change over time and impact the recoverable amounts. The cash flows and value in use are significantly affected
by a number of factors including published reserves, resources, exploration potential and production estimates, together
with economic factors such as spot and future metal prices, discount rates, foreign currency exchange rates, estimates of
costs to produce reserves and future capital expenditure. At the reporting date the group assesses whether any of the
indicators which gave rise to previously recognised impairments have changed such that the impairment loss no longer
exists or may have decreased. The impairment loss is then assessed on the original factors for reversal and if indicated,
such reversal is recognised.

The recoverable amount is estimated based on the positive indicators. If an impairment loss has decreased, the carrying
amount is recorded at the recoverable amount as limited in terms of IAS 36.

The carrying value of tangible assets at 31 December 2017 was $3,742m (2016: $4,111m; 2015: $4,058m). The impairment
and derecognition of tangible assets recognised in the consolidated financial statements for the year ended 31 December
2017 was $288m (2016: $3m; 2015: $5m).

Carrying value of goodwill and intangible assets

Where an investment in a subsidiary, joint venture or an associate is made, any excess of the consideration transferred
over the fair value of the attributable Mineral Resource including value beyond proved and probable Ore Reserve,
exploration properties and net assets is recognised as goodwill.

Intangible assets that have an indefinite useful life and separately recognised goodwill are not subject to amortisation and
are tested annually for impairment and whenever events or changes in circumstance indicate that the carrying amount may
not be recoverable. Assets that are subject to amortisation are tested for impairment whenever events or changes in
circumstance indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The

recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing

impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating
units).

An individual operating mine is not a typical going-concern business because of the finite life of its reserves. The allocation
of goodwill to an individual mine will result in an eventual goodwill impairment due to the wasting nature of the mine

reporting unit. In accordance with the provisions of IAS 36 “Impairment of Assets”, the group performs its annual impairment

review of assigned goodwill during the fourth quarter of each year.

The carrying value of goodwill in the consolidated financial statements at 31 December 2017 was $127m (2016: $126m;
2015: $126m). The impairment of goodwill recognised in the consolidated financial statements for the year ended
31 December 2017 was $9m (2016: nil; 2015: nil).

Income taxes

The group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the
worldwide provision for income taxes due to the complexity of legislation. There are many transactions and calculations for

ANNUAL FINANCIAL STATEMENTS

2017

which the ultimate tax determination is uncertain during the ordinary course of business. The group recognises liabilities for
anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of
these matters is different from the amounts that were initially recorded, such differences will impact the income tax and
deferred tax provisions in the period in which such determination is made.

The group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the
deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax
assets requires the group to make significant estimates related to expectations of future taxable income. Estimates of future
taxable income are based on forecast cash flows from operations and the application of existing tax laws in each
jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the
group to realise the net deferred tax assets recorded at the reporting date could be impacted.

Additionally, future changes in tax laws in the jurisdictions in which the group operates could limit the ability of the group to
obtain tax deductions in future periods.

Carrying values of the group at 31 December 2017:

•

deferred tax asset: $4m (2016: $4m; 2015: $1m);

•

deferred tax liability: $363m (2016: $496m; 2015: $514m);

•

taxation liability: $53m (2016: $111m; 2015: $91m); and

•

taxation asset: $3m (2016: $14m; 2015: $27m).

Unrecognised value of deferred tax assets: $470m (2016: $477m; 2015: $452m).

Provision for environmental rehabilitation obligations

The group’s mining and exploration activities are subject to various laws and regulations governing the protection of the
environment. The group recognises management’s best estimate for decommissioning and restoration obligations in the

period in which they are incurred. Future changes to environmental laws and regulations, life of mine estimates, inflation
rates, foreign currency exchange rates and discount rates could affect the carrying amount of this provision.

The carrying amount of the rehabilitation obligations for the group at 31 December 2017 was $724m (2016: $705m;
2015: $683m).

Stockpiles and metals in process

Costs that are incurred in or benefit the production process are accumulated in stockpiles and metals in process values. Net
realisable value tests are performed at least annually and represent the estimated future sales price of the product, based
on prevailing and long-term metals prices, less estimated costs to complete production and bring the product to sale.

Surface and underground stockpiles and metals in process are measured by estimating the number of tonnes added and
removed from the stockpile, the number of contained ounces based on assay data, and the estimated recovery percentage
based on the expected processing method. Stockpile ore tonnages are verified by periodic surveys.

Although the quantities of recoverable metal are reconciled by comparing the grades of ore to the quantities of metals
actually recovered (metallurgical balancing), the nature of the process inherently limits the ability to precisely monitor
recoverability levels. As a result, the metallurgical balancing process is constantly monitored and engineering estimates are
refined based on actual results over time.

Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result
in write-downs to net realisable value are accounted for on a prospective basis.

The carrying value of inventories (excluding finished goods and mine operating supplies) for the group at 31 December
2017 was $424m (2016: $397m; 2015: $393m).

Recoverable tax, rebates, levies and duties

In a number of countries, particularly in Continental Africa, AngloGold Ashanti is due refunds of indirect tax which remain
outstanding for periods longer than those provided for in the respective statutes.

In addition, AngloGold Ashanti has unresolved tax disputes in a number of countries, particularly in Continental Africa and in
Brazil. If the outstanding input taxes are not received and the tax disputes are not resolved in a manner favourable to
AngloGold Ashanti, it could have a material adverse effect upon the carrying value of these assets.

ANNUAL FINANCIAL STATEMENTS

2017

The net carrying value of recoverable tax, rebates, levies and duties for the group at 31 December 2017 was $174m
(2016: $135m; 2015: $94m).

Post-retirement obligations

The determination of AngloGold Ashanti’s obligation and expense post - retirement liabilities, depends on the selection of

certain assumptions used by actuaries to calculate amounts. These assumptions include, among others, the discount rate,
the expected long-term rate of return of plan assets, health care inflation costs, rates of increase in compensation costs and
the number of employees who reach retirement age before the mine reaches the end of its life. While AngloGold Ashanti
believes that these assumptions are appropriate, significant changes in the assumptions may materially affect post-
retirement obligations as well as future expenses, which may result in an impact on earnings in the periods that the changes
in these assumptions occur.

The carrying value of the post-retirement plans at 31 December 2017 was $122m (2016: $118m; 2015: $89m).

Ore Reserve estimates

An Ore Reserve estimate is an estimate of the amount of product that can be economically and legally extracted from the

group’s properties.

In order to calculate the Ore Reserve, estimates and assumptions are required about a range of

geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production
costs, transport costs, commodity demand, commodity prices and exchange rates.

Estimating the quantity and/or grade of the Ore Reserve requires the size, shape and depth of orebodies to be determined
by analysing geological data such as the logging and assaying of drill samples. This process may require complex and
difficult geological judgements and calculations to interpret the data.

The group is required to determine and report its Ore Reserve in accordance with the South African Code for the reporting
of Exploration Results, Mineral Resources and Mineral Reserves (The SAMREC Code) 2016 Edition.

Because the economic assumptions used to estimate changes in the Ore Reserve from period to period, and because
additional geological data is generated during the course of operations, estimates of the Ore Reserve may change from

period to period. Changes in the reported Ore Reserve may affect the group’s financial results and financial position in a

number of ways, including the following:

•

asset carrying values may be affected due to changes in estimated future cash flows;

•

depreciation, depletion and amortisation charged in the income statement may change where such charges are
determined by the units-of-production method, or where the useful economic lives of assets change;

•

overburden removal costs, including production stripping activities, recorded on the statement of financial position or
charged in the income statement may change due to changes in stripping ratios or the units-of-production method of
depreciation;

•

decommissioning site restoration and environmental provisions may change where changes in the estimated Ore
Reserve affect expectations about the timing or cost of these activities; and

•

the carrying value of deferred tax assets may change due to changes in estimates of the likely recovery of the tax
benefits.

Development expenditure

Development activities commence after project sanctioning by the appropriate level of management. Judgement is applied
by management in determining when a project has reached a stage at which economically recoverable reserves exist such
that development may be sanctioned. In exercising this judgement, management is required to make certain estimates and
assumptions similar to those described in the accounting policy for exploration and evaluation assets. Any such estimates
and assumptions may change as new information becomes available. If, after having started the development activity, a
judgement is made that a development asset is impaired, the appropriate amount will be written off to the income statement.

Provision for silicosis

Significant judgement is applied in estimating the costs that will be incurred to settle the silicosis class action claims and
related expenditure. The final costs may differ from current cost estimates. The provision is based on actuarial assumptions
including:

•

silicosis prevalence rates;

•

estimated settlement per claimant;

•

benefit take-up rates;

•

disease progression rates;

•

timing of cashflows; and

•

discount rate.

ANNUAL FINANCIAL STATEMENTS

2017

Management believes the assumptions are appropriate, however changes in the assumptions may materially affect the
provision and final costs of settlement. In prior years, a silicosis provision was not raised as a reliable estimate could not be
determined.
The carrying value of the silicosis provision at 31 December 2017 was $63m (2016: nil; 2015: nil).

Contingencies

By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. The assessment
of such contingencies inherently involves the exercise of significant judgement and estimates of the outcome of future
events. Such contingencies include, but are not limited to environmental obligations, litigation, regulatory proceedings, tax
matters and losses resulting from other events and developments.

Firstly, when a loss is considered probable and reasonably estimable, a liability is recorded in the amount of the best
estimate for the ultimate loss. The likelihood of a loss with respect to a contingency can be difficult to predict and
determining a meaningful estimate of the loss or a range of loss may not always be practicable based on the information
available at the time and the potential effect of future events and decisions by third parties that will determine the ultimate
resolution of the contingency. It is not uncommon for such matters to be resolved over many years, during which time
relevant developments and new information is continuously evaluated to determine both the likelihood of any potential loss
and whether it is possible to reasonably estimate a range of possible losses. When a loss is probable but a reasonable
estimate cannot be made, disclosure is provided.

In determining the threshold for disclosure on a qualitative and quantitative basis, management considers the potential for a
disruptive effect on the normal functioning of the group and/or whether the contingency could impact investment decisions.
Such qualitative matters considered are reputational risks, regulatory compliance issues and reasonable investor
considerations. For quantitative purposes an amount of $18m, has been considered.

As a global company, the group is exposed to numerous legal risks. The outcome of currently pending and future
proceedings cannot be predicted with certainty. Litigation and other judicial proceedings as a rule raise difficult and
complex legal issues and are subject to uncertainties and complexities including, but not limited to, the facts and
circumstances of each particular case, issues regarding the jurisdiction in which each suit is brought and differences in
applicable law. Upon resolution of any pending legal matter, the group may be forced to incur charges in excess of the
presently established provisions and related insurance coverage. It is possible that the financial position, results of
operations or cash flows of the group could be materially affected by the unfavourable outcome of litigation.

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

2 SEGMENTAL INFORMATION

AngloGold Ashanti Limited's operating segments are being reported based on the financial information provided to the Chief
Executive Officer and the Executive Committee, collectively identified as the Chief Operating Decision Maker (CODM). The
group produces gold as its primary product and does not have distinct divisional segments in terms of principal business
activity, but manages its business on the basis of different geographic segments (including equity accounted investments).
Individual members of the Executive Committee are responsible for geographic regions of the business.

Group analysis by origin is as follows:

Gold production (attributable)

Ounces (000)

2017

2016

2015

South Africa

903

967

1,004

Continental Africa

1,453

1,321

1,435

Australasia

559

520

560

Americas

840

820

831

Continuing operations

3,755

3,628

3,830

Discontinued operations

117

3,755

3,628

3,947

Gold income

US dollar millions

2017

2016

2015

Geographical analysis of gold income by origin is as follows:

South Africa

1,101

1,173

1,132

Continental Africa

(1)

1,895

1,663

1,724

Australasia

709

646

666

Americas

1,104

1,036

967

4,809

4,518

4,489

Equity-accounted investments included above

(453)

(433)

(474)

Continuing operations (note 3)

4,356

4,085

4,015

Discontinued operations

137

4,356

4,085

4,152

Foreign countries included in the above and considered material are:

Brazil

705

659

641

Guinea

489

Tanzania

664

591

615

Geographical analysis of gold income by destination is as follows:

South Africa

1,659

1,719

2,499

North America

456

893

658

Australia

709

645

666

Asia

195

Europe

399

377

332

United Kingdom

1,586

884

139

4,809

4,518

4,489

Equity-accounted investments included above

(453)

(433)

(474)

Continuing operations (note 3)

4,356

4,085

4,015

Discontinued operations

137

Continuing and discontinued operations

4,356

4,085

4,152

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

2 SEGMENTAL INFORMATION CONTINUED

By product revenue

US dollar millions

2017

2016

2015

South Africa

Continental Africa

(1)

Australasia

Americas

135

110

155

139

127

Equity-accounted investments included above

(1)

(1)

Continuing operations

154

138

127

Discontinued operations

154

138

128

Gross profit (loss)

(4)

US dollar millions

2017

2016

2015

South Africa

(3)

149

Continental Africa

(1)

386

334

377

Australasia

159

106

142

Americas

(1)

253

283

247

Corporate and other

(1)

(4)

797

868

810

Equity-accounted investments included above

(13)

(27)

(96)

Continuing operations

784

841

714

Discontinued operations

784

841

733

Total cash costs

US dollar millions

2017

2016

2015

South Africa

968

857

874

Continental Africa

(1)

1,088

976

1,010

Australasia

407

404

393

Americas

547

486

492

Corporate and other

(6)

(9)

3,004

2,723

2,760

Equity-accounted investments included above

(295)

(288)

(267)

Continuing operations

2,709

2,435

2,493

Discontinued operations

125

2,709

2,435

2,618

Cost of sales

US dollar millions

2017

2016

2015

South Africa

1,114

1,041

1,083

Continental Africa

(1)

1,510

1,331

1,347

Australasia

550

540

525

Americas

(1)

851

752

719

Corporate and other

(1)

(3)

(2)

4,022

3,669

3,672

Equity-accounted investments included above

(440)

(406)

(378)

Continuing operations

3,582

3,263

3,294

Discontinued operations

118

3,582

3,263

3,412

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

2 SEGMENTAL INFORMATION CONTINUED

Amortisation

US dollar millions

2017

2016

2015

South Africa

133

167

182

Continental Africa

(1)

421

365

339

Australasia

130

126

117

Americas

(1)

273

260

240

Other, including non-gold producing subsidiaries

959

923

885

Equity-accounted investments included above

(136)

(114)

(108)

Continuing operations

823

809

777

Discontinued operations

823

809

783

Total assets

(1)(2)(3)

US dollar millions

2017

2016

2015

South Africa

1,734

1,818

1,629

Continental Africa

3,153

3,090

3,121

Australasia

929

804

837

Americas

1,258

1,273

1,341

Other, including non-gold producing subsidiaries

145

168

356

7,219

7,153

7,284

Net operating assets

US dollar millions

2017

2016

2015

South Africa

(2)(3)

1,388

1,520

1,352

Continental Africa

1,296

1,278

1,349

Australasia

(2)

664

581

625

Americas

(2)

909

923

963

Other, including non-gold producing subsidiaries

4,281

4,328

4,300

Non-current assets

(5)

US dollar millions

2017

2016

2015

Non-current assets considered material, by country are:

South Africa

1,295

1,678

1,463

Foreign entities

4,259

4,144

4,324

DRC

1,423

1,400

1,406

Ghana

533

520

543

Tanzania

422

437

517

Australia

764

673

703

Brazil

632

645

657

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

2 SEGMENTAL INFORMATION CONTINUED

Capital expenditure

US dollar millions

2017

2016

2015

South Africa

150

182

206

Continental Africa

(1)

409

291

315

Australasia

153

109

Americas

(1)

234

225

196

Other, including non-gold producing subsidiaries

953

811

799

Discontinued operations

953

811

857

Equity-accounted investments included above

(123)

(100)

(131)

830

711

726

(1)

Includes equity-accounted investments.

(2)

Total assets includes allocated goodwill of nil (2016: $8m; 2015: $7m) for South Africa, $119m (2016: $110m; 2015: $111m) for Australasia and $8m (2016: $8m;

2015: $8m) for Americas (note 15). The South African segment includes assets held for sale of $348m (refer note 23).

(3)

In 2017, pre-tax impairments and derecognition of assets of $294m were accounted for in South Africa (2016: $3m; 2015: $5m).

(4)

The group's segmental profit measure is gross profit (loss), which excludes the results of associates and joint ventures. For the reconciliation of gross profit (loss) to

profit before taxation, refer to the group income statement.

(5)

Non-current assets exclude financial instruments and deferred tax assets.

US dollar millions

2017

2016

2015

REVENUE

Revenue consists of the following principal categories:

Gold income (note 2)

4,356

4,085

4,015

By-products (notes 2 and 4)

154

138

127

Royalties received (note 6)

Interest received (notes 31 and 35)

4,543

4,254

4,174

COST OF SALES

Cash operating costs

2,728

2,444

2,493

By-products revenue (note 3)

(154)

(138)

(127)

2,574

2,306

2,366

Royalties

116

105

100

Other cash costs

Total cash costs

2,709

2,435

2,493

Retrenchment costs

Rehabilitation and other non-cash costs

(10)

Amortisation of tangible assets (notes 31 and 35)

817

789

737

Amortisation of intangible assets (notes 31 and 35)

Inventory change

(38)

3,582

3,263

3,294

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

US dollar millions

2017

2016

2015

OTHER OPERATING EXPENSES

Care and maintenance costs (note 35)

Pension and medical defined benefit provisions

Governmental fiscal claims and care and maintenance of old tailings
operations

Other

110

SPECIAL ITEMS

Impairment and derecognition of assets

(1)

297

Impairment of other investments

Retrenchment and related costs

(2)

Legal fees (recoveries) and other costs related to contract terminations
and settlement costs

(3)

(1)

Write-down of inventories

Net (profit) loss on disposal of assets

(8)

(4)

(1)

Royalties received (note 3)

(18)

(9)

(4)

Indirect tax expenses (recoveries)

(2)

(20)

Repurchase premium and cost on settlement of debt facilities

Other

438

FINANCE COSTS AND UNWINDING OF OBLIGATIONS

Finance costs

Finance costs on bonds, corporate notes, bank loans and other

132

148

215

Amortisation of fees

Finance lease charges

142

158

223

Unwinding of obligations

Total finance costs, unwinding of obligations and other discounts
(notes 31 and 35)

169

180

245

SHARE OF ASSOCIATES AND JOINT VENTURES’ PROFIT (LOSS)

Revenue

453

441

489

Operating costs, special items and other expenses

(470)

(446)

(415)

Net interest received

Profit (loss) before taxation

(16)

(2)

Taxation

(17)

Profit (loss) after taxation

(Impairment) impairment reversal of investments in associates

(5)

Impairment reversal of investments in joint ventures (note 17)

Share of associates and joint ventures’ profit (loss) (note 31)

(1)

Impairments and derecognitions include tangible assets $253m, intangible assets $9m and held for sale assets $35m.

(2)

Includes retrenchment costs incurred on the restructuring of the South African operations which was announced during June 2017.

(3)

Includes provision for silicosis class action settlement. For details refer note 26.

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

US dollar millions

2017

2016

2015

EMPLOYEE BENEFITS

Employee benefits including Executive Directors' and Prescribed
Officers' salaries and other benefits

1,024

918

971

Health care and medical scheme costs

- current medical expenses

- defined benefit post-retirement medical expenses

Pension and provident plan costs

- defined contribution

- defined benefit pension plans

Retrenchment costs

Share-based payment expense (note 10)

Included in cost of sales, other operating expenses, special items
and corporate administration, marketing and other expenses

1,270

1,095

1,146

10 SHARE-BASED PAYMENTS

Equity-settled share incentive schemes

Bonus Share Plan (BSP)

Long Term Incentive Plan (LTIP)

(1)

Other

Cash-settled share incentive scheme

Cash-settled Long Term Incentive Plan (CSLTIP)

Total share-based payment expense (note 9)

Equity-settled incentive schemes

Equity schemes include the Bonus Share Plan (BSP), Long Term Incentive Plan (LTIP), Share Retention Bonus Scheme
(RB) and the Co-Investment Plan (CIP). There were no additional schemes introduced during 2017 and no changes to rules
or practices in the existing schemes.

Bonus Share Plan (BSP)

Award date (unvested awards and awards vested during the year)

2017

2016

2015

Calculated fair value

R152.87

R229.22

R130.87

Vesting date 50%

1 Mar 2018

1 Mar 2017

3 Mar 2016

Vesting date 50%

1 Mar 2019

1 Mar 2018

3 Mar 2017

Expiry date

1 Mar 2027

1 Mar 2026

3 Mar 2025

Number of shares

2017

2016

2015

Awards outstanding at beginning of year

4,198,285

4,708,799

3,305,515

Awards granted during the year

1,926,549

2,103,767

2,562,313

Awards lapsed during the year

(218,601)

(204,374)

(165,006)

Awards exercised during the year

(1,426,554)

(2,409,907)

(994,023)

Awards outstanding at end of year

4,479,679

4,198,285

4,708,799

Awards exercisable at end of year

1,904,021

1,170,849

1,687,096

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

10 SHARE BASED PAYMENTS

CONTINUED

Equity-settled incentive schemes CONTINUED

Long Term Incentive Plan (LTIP)

Award date (unvested awards and awards vested during the year)

2015

Calculated fair value

R129.94

Vesting date

3 Mar 2018

Expiry date

3 Mar 2025

Number of shares

2017

2016

2015

Awards outstanding at beginning of year

4,363,330

6,028,193

3,964,362

Awards granted during the year

3,120,555

Awards lapsed during the year

(1,512,857)

(1,160,023)

(830,356)

Awards exercised during the year

(384,116)

(504,840)

(226,368)

Awards outstanding at end of year

2,466,357

4,363,330

6,028,193

Awards exercisable at end of year

455,914

320,169

445,781

Share Retention Bonus Scheme (RB)

Award date (unvested awards and awards vested during the year)

2013

Calculated fair value

R226.46

Vesting date

Aug 2014

Expiry date

Aug 2017

Awards outstanding at 31 December 2017 amounted to 51,853 shares (2016: 72,038 and 2015: 115,736 shares) and an
amount of 20,185 shares (2016: 43,698 and 2015: 34,564 shares) were exercised during the year.

Co-Investment Plan (CIP)

Number of shares

2017

2016

2015

Awards outstanding at beginning of year

97,651

145,040

56,703

Awards granted during the year

112,105

47,590

125,050

Awards lapsed during the year

(62,775)

(18,570)

(6,426)

Awards exercised during the year

(51,603)

(76,409)

(30,287)

Awards outstanding at end of year

95,378

97,651

145,040

Cash-Settled Long Term Incentive Plan (CSLTIP)

There were no changes to rules or practices within the CSLTIP scheme.

Award date (unvested awards and awards vested during the year)

2017

2016

Closing share price at 30 December:

R128.62

R152.58

Vesting date

1 March 2020

1 March 2019

Number of units

2017

2016

Share units outstanding at beginning of year

(1)

2,464,630

30,163

Share units granted during the year

2,572,437

2,537,000

Share units lapsed during the year

(507,597)

(100,490)

Share units exercised during the year

(59,852)

(2,043)

Share units outstanding at end of year

4,469,618

2,464,630

(1)

Amounts include Long Term share units awarded to two employees during 2015 and 2017.

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

US dollar millions

2017

2016

2015

11 TAXATION

South African taxation

Non-mining tax

Prior year (over) under provision

(3)

(14)

Deferred taxation

Impairment and disposal of tangible assets

(72)

(1)

Other temporary differences

(62)

(43)

Prior year under provision

Change in estimated deferred tax rate

(15)

(87)

(72)

Foreign taxation

Normal taxation

201

246

214

Prior year over provision

(26)

(10)

(9)

Deferred taxation

Temporary differences

(65)

Prior year (over) under provision

(17)

Change in statutory tax rate

(2)

195

154

283

108

189

211

Percentage (%)

2017

2016

2015

Tax rate reconciliation

A reconciliation of the effective tax rate in the income statement to the
prevailing estimated corporate tax rate is set out in the following table:

Effective tax rate

(172)

Disallowable items

Derivative and other commodity contracts losses and fair value gains

Exploration, corporate and other disallowable expenses

(12)

(23)

Share of associates and joint ventures' profit (loss)

(10)

Foreign income tax allowances and rate differentials

(18)

(16)

Exchange variation and translation adjustments

(24)

Non-tax effective income (loss)

(26)

(25)

Effect of temporary differences not recognised for deferred tax assets

Capital allowances

Change in estimated deferred tax rate

Change in statutory tax rate

(4)

Prior year over provision

(13)

Estimated corporate tax rate

Tax rates

South Africa

Mining tax rate – maximum statutory rate

(1)

Non-mining tax

Foreign operations include:

Argentina

Australia

Brazil

Ghana

Guinea

Tanzania

(1)

The formula for determining the South African mining tax rate is:

Y = 34 - 170/X
where Y is the percentage rate of tax payable and X is the ratio of mining profit net of any redeemable capital expenditure to mining revenue expressed as a percentage.

GROUP – NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

US dollar millions

2017

2016

2015

11 TAXATION CONTINUED

Analysis of unrecognised deferred tax assets

Available to be utilised against future profits

utilisation required between one and two years

utilisation required between two and five years

333

321

237

utilisation required between five and twenty years

1,210

1,185

1,184

utilisation in excess of twenty years

1,592

1,507

1,421

At the statutory tax rates the unrecognised value of deferred tax assets are: $470m (2016: $477m; 2015: $452m), mainly
relating to tax losses incurred in North America, Ghana and Colombia.

US cents per share

2017

2016

2015

12 EARNINGS (LOSS) PER ORDINARY SHARE

Basic earnings (loss) per ordinary share

(46)

(20)

- Continuing operations

(46)

The calculation of basic earnings (loss) per ordinary share is based on
profits (losses) attributable to equity shareholders of ($191m)
(2016: $63m; 2015: $31m) and 415,440,077 (2016: 412,585,042;
2015: 409,606,858) shares being the weighted average number of
ordinary shares in issue during the financial year.

- Discontinued operations

(28)

The calculation of basic earnings (loss) per ordinary share is based on
profits (losses) attributable to equity shareholders of nil (2016: nil;
2015: ($116m)) and 415,440,077 (2016: 412,585,042; 2015: 409,606,858)
shares being the weighted average number of ordinary shares in issue
during the financial year.

Diluted earnings (loss) per ordinary share

(46)

(20)

- Continuing operations

(46)

The calculation of diluted earnings (loss) per ordinary share is based on
profits (losses) attributable to equity shareholders of ($191m) (2016:
$63m; 2015: $31m) and 415,440,077 (2016: 414,706,400; 2015:
411,371,341) shares being the diluted number of ordinary shares.

- Discontinued operations

(28)

The calculation of diluted earnings (loss) per ordinary share is based on
profits (losses) attributable to equity shareholders of nil (2016: nil;
2015: ($116m)) and 415,440,077 (2016: 414,706,400; 2015: 409,606,858)
shares being the diluted number of ordinary shares.

In calculating the basic and diluted number of ordinary shares outstanding for the year, the following were taken into
consideration:

Number of shares

2017

2016

2015

Ordinary shares

409,265,471

407,519,542

404,747,625

Fully vested options and currently exercisable

(1)

6,174,606

5,065,500

4,859,233

Weighted average number of shares

415,440,077

412,585,042

409,606,858

Dilutive potential of share options

2,121,358

Fully diluted number of ordinary shares

415,440,077

414,706,400

409,606,858

US dollar millions

2017

2016

2015

In calculating the diluted earnings (loss) attributable to equity
shareholders, the following were taken into consideration:

Profit (loss) attributable to equity shareholders

(191)

(85)

(1)

Employee compensation awards are included in basic earnings per share from the date that all necessary conditions have been satisfied and it is virtually certain that

shares will be issued as a result of employees exercising their options.

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

US dollar millions

2017

2016

2015

12 EARNINGS (LOSS) PER ORDINARY SHARE CONTINUED

Headline earnings (loss)

The profit (loss) attributable to equity shareholders was adjusted by the
following to arrive at headline earnings (loss):

Profit (loss) attributable to equity shareholders from continuing and
discontinued operations

(191)

(85)

Net impairment (impairment reversal) and derecognition of assets

298

(16)

Net (profit) loss on disposal of assets

(8)

Special items of associates and joint ventures

Exchange loss on foreign currency translation reserve release

Taxation on items above

(72)

(2)

111

(73)

Cents

Basic headline earnings (loss) per share

The calculation of basic headline earnings (loss) per ordinary share is
based on basic headline earnings (losses) of $27m (2016: $111m;
2015: ($73m)) and 415,440,077 (2016: 412,585,042; 2015:
409,606,858) shares being the weighted average number of ordinary
shares in issue during the year.

(18)

Diluted headline earnings (loss) per share

The calculation of diluted headline earnings (loss) per ordinary share is
based on diluted headline earnings (losses) of $27m (2016: $111m;
2015: ($73m)) and 415,440,077 (2016: 414,706,400; 2015:
409,606,858) shares being the weighted average number of ordinary
shares in issue during the year.

(18)

13 DIVIDENDS

Ordinary shares

Dividend number 118 of 130 SA cents per share was declared on 21
February 2017 and paid on 7 April 2017 (10 US cents per share).

GROUP – NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

14 TANGIBLE ASSETS

US dollar millions

Mine

development

costs

Mine infra-

structure

(2)

Mineral

rights

and

dumps

Exploration

and

evaluation

assets

Assets

under

construction

Land and

buildings

(3)(4)

Total

Cost

Balance at 1 January 2015

7,238

5,369

958

757

14,445

Additions

- project capital

102

128

- stay-in-business capital

345

158

561

- capitalised leased assets

Disposals

(113)

(772)

(25)

(29)

(291)

(7)

(1,237)

Transfers and other movements

(1)

(497)

(4)

(1)

(298)

(1)

(801)

Translation

(710)

(281)

(19)

(72)

(9)

(1,091)

Balance at 31 December 2015

6,282

4,432

914

356

12,067

Accumulated amortisation and
impairments

Balance at 1 January 2015

5,045

3,515

893

9,582

Amortisation for the year

475

257

740

Impairment and derecognition of
assets

Disposals

(113)

(727)

(25)

(29)

(49)

(6)

(949)

Transfers and other movements

(1)

(458)

(346)

(1)

(806)

Translation

(465)

(82)

(12)

(1)

(3)

(563)

Balance at 31 December 2015

4,488

2,618

862

8,009

Net book value at
31 December 2015

1,794

1,814

327

4,058

Cost

Balance at 1 January 2016

6,282

4,432

914

356

12,067

Additions

- project capital

- stay-in-business capital

363

192

611

- capitalised leased assets

Disposals

(45)

(46)

(91)

Transfers and other movements

(1)

(884)

(190)

(1,049)

Translation

202

105

342

Balance at 31 December 2016

5,943

4,576

919

450

11,975

Accumulated amortisation and
impairments

Balance at 1 January 2016

4,488

2,618

862

8,009

Amortisation for the year

546

254

806

Impairment and derecognition of
assets

Disposals

(43)

(86)

Transfers and other movements

(1)

(964)

(70)

(3)

(1,037)

Translation

135

169

Balance at 31 December 2016

4,163

2,792

868

7,864

Net book value at
31 December 2016

1,780

1,784

424

4,111

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

14 TANGIBLE ASSETS CONTINUED

US dollar millions

Mine

development

costs

Mine infra-

structure

(2)

Mineral

rights

and

dumps

Exploration

and

evaluation

assets

Assets

under

construction

Land and

buildings

(3)(4)

Total

Cost

Balance at 1 January 2017

5,943

4,576

919

450

11,975

Additions

- project capital

125

156

- stay-in-business capital

371

257

665

Disposals

(1)

(20)

(21)

Transfers and other movements

(1)

(168)

(21)

(27)

(291)

(506)

Transfer to non-current assets and
liabilities held for sale

(785)

(281)

(7)

(72)

(3)

(1,148)

Translation

174

293

Balance at 31 December 2017

5,562

4,382

892

490

11,414

Accumulated amortisation and
impairments

Balance at 1 January 2017

4,163

2,792

868

7,864

Amortisation for the year

553

272

829

Impairment and derecognition of
assets

(5)

182

253

Disposals

(1)

(20)

(21)

Transfers and other movements

(1)

(326)

(163)

(27)

(516)

Transfer to non-current assets and
liabilities held for sale

(685)

(169)

(4)

(1)

(859)

Translation

122

Balance at 31 December 2017

3,979

2,796

853

7,672

Net book value at
31 December 2017

1,583

1,586

464

3,742

(1)

Transfers and other movements include amounts from deferred stripping, change in estimates of decommissioning assets, asset reclassifications and derecognition of

assets with a carrying value of nil.

(2)

Included in the amounts for mine infrastructure are assets held under finance leases with a net book value of $56m (2016 :$58m; 2015: $61m).

(3)

Included in the amounts for land and buildings are assets held under finance leases with a net book value of $6m (2016: $7m; 2015: $7m).

(4)

Assets of $11m (2016: $12m; 2015: $8m) have been pledged as security.

(5)

Impairment and derecognition of assets including the following:

Impairment calculation assumptions as at 31 December 2017 – goodwill, tangible and intangible assets

Management assumptions for the value in use of tangible assets and goodwill include:

•

the gold price assumption represents management’s best estimate of the future price of gold. A long-term real gold price

of $1,240/oz (2016: $1,212/oz) is based on a range of economic and market conditions that will exist over the remaining
useful life of the assets.

Annual life of mine plans take into account the following:

•

proved and probable Ore Reserve;

•

value beyond proved and probable reserves (including exploration potential) determined using the gold price
assumption referred to above;

•

In determining the impairment for each cash generating unit, the real pre-tax rate was derived from the weighted
average cost of capital (WACC) using the Capital Asset Pricing Model ("CAPM") to determine the required return on
equity with risk factors consistent with the basis used in 2016. At 31 December 2017, the derived group WACC was
7.50% (real post-tax) which is 20 basis points higher than in 2016 of 7.30%, and is based on the industry average
capital structure of the major gold companies considered to be appropriate peers. In determining the WACC for each
cash generating unit, sovereign and mining risk factors are considered to determine country specific risks. In certain
instances, a specific risk premium was added to large projects being undertaken or the turnaround nature of a specific
mine to address uncertainties in the forecast of the cash flows;

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

14 TANGIBLE ASSETS CONTINUED

●

foreign currency cash flows translated at estimated forward exchange rates and then discounted using appropriate
discount rates for that currency;

●

cash flows used in impairment calculations are based on life of mine plans which range from 2 years to 42 years; and

●

variable operating cash flows are increased at local Consumer Price Index rates.

Impairments and derecognitions of tangible assets

For the year ended 31 December 2017, the following impairments and derecognitions of tangible assets were recognised:

US dollar millions

TauTona

Kopanang

Surface Operations

Moab Khotsong

112

Mponeng

First Uranium

Other

253

Impairment of cash generating units

The group reviews and tests the carrying value of its mining assets when events or changes in circumstances suggest that
the carrying amount may not be recoverable.

During June 2017, due to a change in mine plans to restructure the South African operations, Kopanang mine, TauTona
mine including Savuka section and the West Gold Plant section of the Surface operations in South Africa were fully
impaired as they were not expected to generate future economic benefits.

On 19 October 2017, AngloGold Ashanti announced the sale of various assets in the Vaal River Region including the Moab
Khotsong Mine and related assets (Moab) to Harmony Gold Mining Company Limited for a cash consideration of US$300m.
Moab was accordingly transferred to held for sale and written down to the fair value less cost to sell. Refer note 23 –

Non-current assets and liabilities held for sale.

In a separate announcement on 19 October 2017, AngloGold Ashanti announced the sale of its Kopanang Mine, the West
Gold Plant and related infrastructure to Heaven-Sent SA Sunshine Investment Company Limited for a cash consideration of
R100m. Kopanang Mine was accordingly transferred to held for sale and written down to the fair value less cost to sell.
Refer note 23 –Non-current assets and liabilities held for sale.

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

15 INTANGIBLE ASSETS

US dollar millions

Goodwill

Software

and

licences

Royalty

tax rate

concession

and other

Total

Cost

Balance at 1 January 2015

400

152

612

Additions

Disposals

(9)

Transfers and other movements

(1)

(10)

Translation

(20)

(18)

(38)

Balance at 31 December 2015

380

118

558

Accumulated amortisation and impairments

Balance at 1 January 2015

258

387

Amortisation for the year

Disposals

(7)

Transfers and other movements

(1)

(7)

Translation

(4)

(12)

(16)

Balance at 31 December 2015

254

397

Net book value at 31 December 2015

126

161

Cost

Balance at 1 January 2016

380

118

558

Additions

Transfers and other movements

(1)

(4)

Translation

(1)

Balance at 31 December 2016

379

125

564

Accumulated amortisation and impairments

Balance at 1 January 2016

254

397

Amortisation for the year

Transfers and other movements

(1)

(3)

Translation

(1)

Balance at 31 December 2016

253

112

419

Net book value at 31 December 2016

126

145

Cost

Balance at 1 January 2017

379

125

564

Additions

Transfer to non-current assets and liabilities held for sale

(17)

Transfers and other movements

(1)

(263)

(1)

(264)

Translation

Balance at 31 December 2017

127

112

299

Accumulated amortisation and impairments

Balance at 1 January 2017

253

112

419

Amortisation for the year

Impairment

Transfer to non-current assets and liabilities held for sale

(15)

Transfers and other movements

(1)

(263)

(1)

(264)

Translation

Balance at 31 December 2017

104

161

Net book value at 31 December 2017

127

138

(1)

Transfers and other movements include amounts from asset reclassifications and amounts written off.

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

15 INTANGIBLE ASSETS CONTINUED

Impairment calculation assumptions for goodwill

Based on an analysis carried out by the group in 2017, the carrying value and value in use of cash generating units (CGUs)
with goodwill that were most sensitive is:

US dollar millions

2017

Carrying Value

Value in use

AngloGold

Ashanti Australia Limited – Sunrise Dam

233

402

As at 31 December 2017, the recoverable amount of AngloGold Ashanti Australia Limited – Sunrise Dam exceeded its

carrying amount by $169m. The AngloGold Ashanti Australia Limited – Sunrise Dam CGU had $119m goodwill at that date.

It is estimated that a decrease of the long term real gold price of $1,240/oz by 7%, would cause the recoverable amount of
this CGU to equal its carrying amount. The sensitivity analysis has been provided on the basis that the key assumption
changes without a change in the other assumptions. However, for a change in each of the assumptions used, it is
impracticable to disclose the consequential effect of changes on the other variables used to measure the recoverable
amount because these assumptions and others used in impairment testing of goodwill are inextricably linked.

Therefore it is possible that outcomes within the next financial year that are different from the assumptions used in the
impairment testing process for goodwill could require a material adjustment to the carrying amounts in future periods.

Net book value of goodwill allocated to each of the CGUs:

US dollar millions

2017

2016

2015

- Sunrise Dam

119

110

111

- First Uranium (Pty) Limited

(1)

- Serra Grande

(note 2)

127

126

Real pre-tax discount rates applied in impairment calculations on CGUs
for which the carrying amount of goodwill is significant are as follows:

- Sunrise Dam

(2)

8.3%

8.8%

7.9%

(1)

Goodwill has been allocated to its respective CGU's where it is tested for impairment as part of the CGU. The group reviews and tests the carrying value of goodwill on

an annual basis for impairment. Following the impairment review, goodwill to the value of $9m at First Uranium (Pty) Ltd was impaired utilising a real pre-tax discount

rate of 9.23% during 2017. The discount rates for 2017 were determined on a basis consistent with the 2016 and 2015 discount rates. The value in use recoverable

amount of First Uranium (Pty) Ltd is $317m (2016: $336m; 2015: $304m).

(2)

The value in use of the CGU is $402m in 2017 (2016: $487m; 2015: $504m).

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

16 MATERIAL PARTLY-OWNED SUBSIDIARIES

Name

Non-controlling interest % holding Country of incorporation and operation

2017

2016

2015

Cerro Vanguardia S.A. (CVSA)

7.5

7.5

7.5 Argentina

Société AngloGold Ashanti de Guinée S.A. (Siguiri)

15.0

15.0

15.0 Republic of Guinea

Financial information of subsidiaries that have material non-controlling interests are provided below:

US dollar millions

2017

2016

2015

Profit allocated to material non-controlling interest

CVSA

Siguiri

Accumulated balances of material non-controlling interests

CVSA

Siguiri

Summarised financial information of subsidiaries is as follows. The information is based on amounts including inter-
company balances.

US dollar millions

CVSA

Siguiri

Statement of profit or loss for 2017

Revenue

517

489

Profit (loss) for the year

Total comprehensive income (loss) for the year, net of tax

Attributable to non-controlling interests

Dividends paid to non-controlling interests

(9)

(10)

Statement of profit or loss for 2016

Revenue

472

367

Profit (loss) for the year

Total comprehensive income (loss) for the year, net of tax

Attributable to non-controlling interests

Dividends paid to non-controlling interests

(6)

(9)

Statement of profit or loss for 2015

Revenue

399

350

Profit (loss) for the year

Total comprehensive income (loss) for the year, net of tax

Attributable to non-controlling interests

Dividends paid to non-controlling interests

(4)

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

16 MATERIAL PARTLY-OWNED SUBSIDIARIES CONTINUED

Summarised financial information of subsidiaries is as follows. The information is based on amounts before inter-company
eliminations.

US dollar millions

CVSA

Siguiri

Statement of financial position as at 31 December 2017

Non-current assets

193

206

Current assets

171

189

Non-current liabilities

(103)

(101)

Current liabilities

(84)

(82)

Total equity

177

212

Statement of financial position as at 31 December 2016

Non-current assets

241

174

Current assets

177

178

Non-current liabilities

(108)

(79)

Current liabilities

(107)

(85)

Total equity

203

188

Statement of financial position as at 31 December 2015

Non-current assets

245

151

Current assets

182

158

Non-current liabilities

(114)

(79)

Current liabilities

(109)

(55)

Total equity

204

175

Statement of cash flows for the year ended 31 December 2017

Cash inflow (outflow) from operating activities

189

152

Cash inflow (outflow) from investing activities

(55)

(82)

Cash inflow (outflow) from financing activities

(118)

(58)

Net increase (decrease) in cash and cash equivalents

Statement of cash flows for the year ended 31 December 2016

Cash inflow (outflow) from operating activities

110

120

Cash inflow (outflow) from investing activities

(57)

(59)

Cash inflow (outflow) from financing activities

(97)

(53)

Net increase (decrease) in cash and cash equivalents

(44)

Statement of cash flows for the year ended 31 December 2015

Cash inflow (outflow) from operating activities

Cash inflow (outflow) from investing activities

(60)

(29)

Cash inflow (outflow) from financing activities

(36)

Net increase (decrease) in cash and cash equivalents

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

17 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

US dollar millions

2017

2016

2015

Carrying value

Investments in associates

Investments in joint ventures

1,471

1,428

1,431

1,507

1,448

1,465

Detailed disclosures are provided for the years in which investments in associates and joint ventures are considered to be
material.

Summarised financial information of associates is as follows:

US dollar millions

2017

2016

2015

Aggregate statement of profit or loss for associates (attributable)

Revenue

Operating costs and expenses

(11)

(38)

(45)

Taxation

(1)

Profit (loss) for the year

(9)

Total comprehensive profit (loss) for the year, net of tax

(9)

Investments in material joint ventures comprise:

Name

Effective %

Description

Country of incorporation and operation

2017

2016

2015

Kibali Goldmines S.A.

(1)

45.0

45.0

Exploration and mine
development

The Democratic Republic of the
Congo

(1)

AngloGold Ashanti Limited has a 50% interest in Kibali (Jersey) Limited (Kibali) which holds our effective 45% interest in Kibali Goldmines S.A.

US dollar millions

2017

2016

2015

Carrying value of joint ventures

Kibali

1,423

1,400

1,406

Immaterial joint ventures

1,471

1,428

1,431

Reversal (impairment) of investments in joint ventures

Sadiola (note 8)

The cumulative unrecognised share of losses of the joint ventures:

Sadiola

Morila

Yatela

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

17 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES CONTINUED

Summarised financial information of joint ventures is as follows (not attributable):

Kibali

US dollar millions

2017

2016

2015

Statement of profit or loss

Revenue

755

709

747

Other operating costs and expenses

(530)

(471)

(398)

Amortisation of tangible and intangible assets

(264)

(211)

(193)

Finance costs and unwinding of obligations

(5)

(5)

Interest received

Taxation

(18)

Profit for the year

138

Other comprehensive income for the year, net of tax

Total comprehensive income for the year, net of tax

141

Dividends received from joint ventures (attributable)

Statement of financial position

Non-current assets

2,834

2,805

2,754

Current assets

166

179

259

Cash and cash equivalents

Total assets

3,003

3,003

3,035

Non-current financial liabilities

Other non-current liabilities

Current financial liabilities

Other current liabilities

107

133

125

Total liabilities

178

222

244

Net assets

2,825

2,781

2,791

Group's share of net assets

1,413

1,391

1,396

Other

Carrying amount of interest in joint ventures

1,423

1,400

1,406

US dollar millions

2017

2016

2015

Aggregate statement of profit or loss for immaterial joint ventures
(attributable)

Revenue

113

114

138

Other operating costs and expenses

(94)

(95)

(102)

Amortisation of tangible and intangible assets

(16)

(18)

(21)

Taxation

(2)

(3)

(7)

Profit (loss) for the year

(2)

Total comprehensive income (loss) for the year, net of tax

(2)

GROUP – NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

US dollar millions

2017

2016

2015

18 OTHER INVESTMENTS

Non-current investments

Listed investments

(1)

Available-for-sale

Balance at beginning of year

Additions

Disposals

(1)

(1)

(3)

Fair value adjustments

(7)

Impairments

(3)

(9)

Translation

(7)

Balance at end of year

The available-for-sale non-current investments consist of ordinary
shares and collective investment schemes and primarily comprise:

International Tower Hill Mines Limited (ITH)

Corvus Gold Corporation

Various listed investments held by Environmental Rehabilitation Trust
Fund

Pure Gold Mining

Orinoco Gold Limited

Other

Held-to-maturity

The held-to-maturity investment consists of government bonds held by
the Environmental Rehabilitation Trust Fund administered by Ashburton
Investments.

The fair value of bonds held-to-maturity is $6m (2016: $8m; 2015: $6m)
and has a sensitivity of less than $1m (2016: less than $1m; 2015: less
than $1m) for a 1% change in interest rates.

Current investments

Listed investments - available for sale

Book value of listed investments

Non-current assets

Unlisted investments

Balance at beginning of year

Additions

Maturities

(73)

(58)

(74)

Transfer to non-current assets and liabilities held for sale

(32)

Accrued interest

Translation

(18)

Balance at end of year

(1)

The group’s listed available-for-sale equity investments are susceptible to market price risk arising from uncertainties about the future values of the investments.
At the reporting date, the majority of equity investments were listed on the Toronto Stock Exchange and the JSE.

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

US dollar millions

2017

2016

2015

18 OTHER INVESTMENTS CONTINUED

Non-current investments (continued)

Unlisted investments (continued)

The unlisted investments include:

Negotiable Certificates of Deposit - Environmental Rehabilitation Trust
Fund administered by Ashburton Investments.

Other

Book value of unlisted investments

Total book value of other investments (note 34)

138

130

INVENTORIES

Non-current

Raw materials - ore stockpiles

100

Current

Raw materials

- ore stockpiles

261

233

232

- heap-leach inventory

Work in progress

- metals in process

Finished goods

- gold doré/bullion

- by-products

Total metal inventories

388

377

336

Mine operating supplies

295

295

310

683

672

646

Total inventories

(1)

783

756

736

(1)

The amount of the write-down of ore stockpiles, metals in process, by-products and mine operating supplies to net realisable value, and recognised as an expense in

special items and cost of sales is $17m (2016: $30m; 2015: $30m).

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

US dollar millions

2017

2016

2015

20 TRADE, OTHER RECEIVABLES AND OTHER ASSETS

Non-current

Prepayments

Recoverable tax, rebates, levies and duties

Current

Trade and loan receivables

Prepayments

Recoverable tax, rebates, levies and duties

127

124

117

Other receivables

222

255

196

Total trade, other receivables and other assets

289

289

209

Current trade and loan receivables are generally on terms less than
90 days.

At 31 December 2017 trade receivables of $2m have been pledged as
security.

There is a concentration of risk in respect of amounts due from
Revenue Authorities for recoverable tax, rebates, levies and duties from
subsidiaries in the Continental Africa segment. These values are
summarised as follows:

Recoverable value added tax

106

Recoverable fuel duties

Appeal deposits

21 CASH RESTRICTED FOR USE

Non-current

Cash balances held by Environmental Rehabilitation Trust Funds and
other

Current

Cash restricted by prudential solvency requirements and other

Cash balances held by the Tropicana joint venture

Total cash restricted for use (note 34)

22 CASH AND CASH EQUIVALENTS

Cash and deposits on call

170

167

344

Money market instruments

140

Total cash and cash equivalents (notes 34 and 35)

205

215

484

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

23 NON-CURRENT ASSETS AND LIABILITIES HELD FOR SALE

Kopanang gold mine, West Gold Plant and related infrastructure (Kopanang Sale Assets)

The Kopanang gold mine is situated approximately 170 kilometres southwest of Johannesburg. It is included in the South
Africa reporting segment. Kopanang gold mine was previously recognised as a combination of tangible assets, current
assets, current and long-term liabilities. On 19 October 2017, AngloGold Ashanti Limited announced that it has entered into
an agreement to dispose of the Kopanang Sale Assets to Heaven-Sent SA Sunshine Investment Company Limited (“HSC”),

a Chinese capital management company headquartered in Hong Kong. The purchase consideration will be settled on the
Closing Date by a payment of R100 million in cash and the transfer of certain gold bearing rock dumps from a subsidiary of
HSC, namely Village Main Reef Limited to AngloGold Ashanti. Kopanang mine is a single shaft system, which produces
gold as its primary output. In 2017, Kopanang mine produced 91,000 ounces of gold (2016: 91,000 ounces).

Moab Khotsong gold mine and related infrastructure, Nufcor and Margaret Water Company (Moab Sale Assets)

The Moab Khotsong gold mine is situated about 180 kilometres southwest of Johannesburg. It is included in the South
Africa reporting segment. Moab Khotsong gold mine was previously recognised as a combination of tangible assets, current
assets, current and long-term liabilities. On 19 October 2017, AngloGold Ashanti Limited announced that it has entered into
a sale and purchase agreement, to dispose of various assets (Moab Sale Assets) situated in the Vaal River area of South
Africa to Harmony Gold Mining Company Limited for a cash consideration of US$300 million.

The assets and related interests to be sold include the following:

•

The Moab Khotsong mine (which incorporates the Great Noligwa mine) and related infrastructure;

•

AngloGold Ashan

ti’s entire interest in Nuclear Fuels Corporation of South Africa Proprietary Limited; and

•

AngloGold Ashanti’s entire interest in Margaret Water Company NPC.

Moab Khotsong is an underground mine which produced 294,000 ounces in 2017 (2016: 280,000 ounces).

Subsequent to year end the conditions precedent were fulfilled. Refer note 36.

The carrying amount of major classes of assets and liabilities include:

2017

US dollar millions

Moab

Sale Assets

Kopanang

Sale Assets

Total

Tangible assets

(1)

277

289

Intangible assets

Inventories

Other investments

Non-current assets held for sale (note 2)

326

348

Environmental and rehabilitation provisions

Provision for pension and post-retirement benefits

Trade, other payables and deferred income

Deferred taxation

Non-current liabilities held for sale

112

126

Net non-current assets held for sale

214

222

(1)

Includes impairments of $35m subsequent to being transferred to held for sale.

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

US dollar millions

2017

2016

2015

24 SHARE CAPITAL AND PREMIUM

Share capital

Authorised

600,000,000 ordinary shares of 25 SA cents each

2,000,000 A redeemable preference shares of 50 SA cents each

5,000,000 B redeemable preference shares of 1 SA cent each

30,000,000 C redeemable preference shares of no par value

Issued and fully paid

410,054,615 (2016: 408,223,760; 2015: 405,265,315) ordinary shares
of 25 SA cents each

2,000,000 A redeemable preference shares of 50 SA cents each

778,896 B redeemable preference shares of 1 SA cent each

Treasury shares held within the group:
2,778,896 A and B redeemable preference shares

Share premium

Balance at beginning of year

7,145

7,103

7,078

Ordinary shares issued

7,171

7,145

7,103

Less: held within the group

Redeemable preference shares

(53)

(53)

Balance at end of year

7,118

7,092

7,050

Share capital and premium

7,134

7,108

7,066

The rights and restrictions applicable to the A and B redeemable preference shares were unchanged during 2017. The
C redeemable preference shares have no par value but have the same rights as the B preference shares except that the
C preference shares rank after the B preference shares (but prior to the A preference shares) as regards the payment of
dividends, redemption proceeds and payment on winding up of the company.

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

US dollar millions

2017

2016

2015

25 BORROWINGS

Non-current

Unsecured

Debt carried at fair value

$1.25bn bonds - issued July 2013

498

On 1 August 2016, the remaining portion of the bonds were settled.

Debt carried at amortised cost

Rated bonds - issued July 2012

759

758

756

Semi-annual coupons are paid at 5.125% per annum. The bonds were
issued on 30 July 2012, are repayable on 1 August 2022 and are
US dollar-based.

Rated bonds - issued April 2010

1,001

1,000

999

Semi-annual coupons are paid at 5.375% per annum on $700m 10-year
bonds and at 6.5% per annum on $300m 30-year bonds. The $700m
bonds are repayable in April 2020 and the $300m bonds are repayable
in April 2040. The bonds are US dollar-based.

Syndicated revolving credit facility ($1bn)

194

Semi-annual interest paid at LIBOR plus 1.5% per annum. The
applicable margin is subject to a ratings grid. The facility was issued on
17 July 2014 and is available until 17 July 2019. The facility is US
dollar-based.

Syndicated revolving credit facility (A$500m)

163

168

Interest charged at BBSY plus 2% per annum. The applicable margin is
subject to a ratings grid. The loan is repayable in July 2019 and is
Australian dollar-based.

Syndicated loan facility (R1.5bn)

The facility was issued on 3 December 2013 and was settled on
12 December 2017.

Syndicated revolving credit facility (R2.5bn)

Quarterly interest paid at JIBAR plus 1.8% per annum. The facility was
issued on 12 December 2017 and is available until 12 December 2020,
with the option on application to extend by two years. The loan is
SA rand-based.

Syndicated loan facility (R1.4bn)

Quarterly interest paid at JIBAR plus 1.65% per annum. The facility was
issued on 7 July 2015 and is available until 7 July 2020. The loan is
SA rand-based.

Syndicated loan facility (R1bn)

Quarterly interest paid at JIBAR plus 1.3% per annum. The facility was
issued on 3 November 2017 and is available until 3 November 2020,
with the option on application to extend by two years. The loan is SA
rand-based.

Revolving Credit Facilities - $100m

Various loans with interest rates ranging from 6.2% to 8% above
LIBOR. The facilities were issued on 23 August 2016 and are available
until 23 August 2019 and are US dollar-based.

Other

Interest charged at various rates from 2.5% plus delta exchange rate on
individual instalments per annum to 4.5% per annum. Repayments
terminate in June 2023. All loans are Brazilian real-based.

The loans are subject to debt covenant arrangements for which no
default event occurred.

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

US dollar millions

2017

2016

2015

25 BORROWINGS CONTINUED

Non-current

CONTINUED

Secured

Finance leases

Turbine Square Two (Pty) Limited

The leases are capitalised at an implied interest rate of 9.8% per
annum. Lease payments are due in monthly instalments terminating in
March 2022 and are SA rand-based. The buildings financed are used
as security for these loans (note 35).

Australian Gas Pipeline

The contract with the supplier of gas contains embedded leases which
have been determined to bear interest at an average of 6.75% per
annum. The embedded leases commenced in November and
December 2015 and are for a 10 and 12 year duration, respectively.
The leases are repayable in monthly instalments and are Australian
dollar-based. The equipment related to the embedded leases is used as
security for these loans.

Other

Various loans with interest rates ranging from 2.5% to 15.5% per
annum. These loans are repayable from 2016 to 2041. Some of these
loans are secured by the financed assets.

Total non-current borrowings including current portion

2,268

2,178

2,688

Current portion of non-current borrowings included in current liabilities

(38)

(34)

(51)

Total non-current borrowings

2,230

2,144

2,637

Current

Current portion of non-current borrowings included above

Unsecured

R750m Bonds - issued December 2013

Total current borrowings

100

Total borrowings (notes 34 and 35)

2,268

2,178

2,737

Amounts falling due

Within one year

100

Between one and two years

219

170

Between two and five years

1,687

902

1,495

After five years

324

1,072

1,078

(notes 34 and 35)

2,268

2,178

2,737

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

US dollar millions

2017

2016

2015

25 BORROWINGS CONTINUED

Currency

The currencies in which the borrowings are denominated are as follows:

US dollar

1,807

1,844

2,447

Australian dollar

221

225

158

SA rand

237

106

130

Brazilian real

(notes 34 and 35)

2,268

2,178

2,737

Undrawn facilities

Undrawn borrowing facilities as at 31 December are as follows:

Syndicated revolving credit facility ($1bn) - US dollar

965

950

800

Syndicated revolving credit facility (A$500m) - Australian dollar

226

191

266

Syndicated revolving credit facility (R1.5bn) - SA rand

Syndicated revolving credit facility (R2.5bn) - SA rand

146

Syndicated revolving credit facility (R1.4bn) - SA rand

102

FirstRand Bank Limited (R750m) - SA rand

Revolving credit facilities ($100m) - US dollar

1,515

1,361

1,222

Change in liabilities arising from financing activities:

Reconciliation of total borrowings

A reconciliation of the total borrowings included in the statement of
financial position is set out in the following table:

Opening balance

2,178

2,737

3,721

Acquisitions and disposals - other

Proceeds from borrowings

815

787

421

Repayment of borrowings

(767)

(1,333)

(1,288)

Finance costs paid on borrowings

(125)

(159)

(239)

Interest charged to the income statement

130

145

213

Fair value adjustments on issued bonds

(9)

(66)

Translation

(72)

Closing balance

2,268

2,178

2,737

Reconciliation of finance costs paid:

A reconciliation of the finance cost paid included in the statement of
cash flows is set out in the following table:

Finance costs paid on borrowings

125

159

239

Commitment fees, environmental guarantees fees and other borrowing
costs

Total finance costs paid

138

172

251

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

US dollar millions

2017

2016

2015

26 ENVIRONMENTAL REHABILITATION AND OTHER PROVISIONS

Environmental rehabilitation obligations

Provision for decommissioning

Balance at beginning of year

279

272

296

Charge to income statement

Change in estimates

(1)

(12)

Unwinding of decommissioning obligation

Transfer to non-current assets and liabilities held for sale

(20)

(11)

Utilised during the year

(2)

(2)

(3)

Translation

(26)

Balance at end of year

286

279

272

Provision for restoration

Balance at beginning of year

426

411

555

Charge to income statement

Change in estimates

(1)

(17)

(2)

(40)

Unwinding of restoration obligation

Transfer to non-current assets and liabilities held for sale

(3)

(110)

Transfer to current portion

(17)

Utilised during the year

(4)

(3)

(2)

Translation

(8)

Balance at end of year

409

426

411

Other provisions

(2)(3)

Balance at beginning of year

172

164

201

Charge to income statement

Change in estimates

Additions

Transfer (to) from trade and other payables

(6)

(2)

Unwinding of other provisions

Utilised during the year

(35)

(30)

(25)

Translation

(51)

Balance at end of year

247

172

164

Total environmental rehabilitation and other provisions

942

877

847

(1)

The change in estimates is attributable to changes in discount rates due to changes in global economic assumptions and changes in mine plans resulting in a change in
cash flows and changes in design of tailings storage facilities and in methodology following requests from the environmental regulatory authorities. These provisions are

expected to unwind beyond the end of the life of mine.

(2)

Other provisions include the following significant item: Chemwes (Pty) Limited, a subsidiary of First Uranium (Pty) Limited acquired by AngloGold Ashanti Limited during

2012, agreed to sell 25% of its production, capped at 312,500oz from 1 January 2012, to Franco-Nevada (Barbados) Corporation. Franco Nevada is required to pay

$400/oz which inflates at 1% compounded annually from 2013. These factors were considered in determining the commodity contract obligation. The provision is

calculated as the present value of the portion which is deemed onerous in light of the current market conditions using a gold forward for the duration of the contract of

$1,303/oz (2016: $1,152/oz; 2015: $1,061/oz). As at 31 December 2017 the remaining production due to Franco Nevada is 170,435oz (2016: 197,528oz; 2015:

220,447oz).

(3)

Other provisions include the provision for the silicosis class action litigation of $63m.

The undiscounted rehabilitation provision based on real cash flows is $991m (2016: $867m; 2015: $831m).

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

26 ENVIRONMENTAL REHABILITATION AND OTHER PROVISIONS CONTINUED

Provision for silicosis settlement

AngloGold Ashanti Limited together with other mining companies, are named in a class action for silicosis and tuberculosis
which was certified by the Johannesburg High Court in May 2016. The companies requested leave to appeal to the
Supreme Court of Appeal (SCA), which was granted on 13 September 2016 and was scheduled to be heard from 19 to 23
March 2018. On 10 January 2018, in response to a request from all parties involved in the appeal to the SCA in respect of
the silicosis and tuberculosis class action litigation, the Registrar of the SCA postponed the hearing date of the appeal until
further notice.

A gold mining industry working group consisting of African Rainbow Minerals Limited, Anglo American South Africa Limited,
AngloGold Ashanti Limited, Gold Fields Limited, Sibanye-Stillwater Limited and Harmony Gold Mining Company Limited
(collectively the working group) was formed in November 2014 to address issues relating to the compensation and medical
care for occupational lung diseases in the gold mining industry in South Africa. Essentially, the working group is seeking a
comprehensive and sustainable solution which deals with both legacy compensation issues and future legal frameworks
which, while being fair to employees, also ensures the future sustainability of companies in the industry. The working group
has engaged all stakeholders on these matters, including government, organised labour, other mining companies and legal
representatives of claimants who have filed legal suits against the companies. The working group believes that achieving a
comprehensive settlement which is fair to past, present and future employees and sustainable for the sector is preferable to
protracted litigation.

The facts of the matter have previously been disclosed as a contingent liability as an amount could not be reliably
determined. As a result of the progress made by the working group and the status of negotiations with affected
stakeholders, management is now in a position to reasonably estimate AngloGold Ashanti's share of a possible settlement
of the class action claims and related costs within an acceptable range.

A pre-tax charge of $63 million has been recognised in special items for the year ended 31 December 2017. Going forward,
annual charges in the provision are expected to consist of the time value of money (recognised as a finance cost) and
changes in estimates in special items. The expected contributions (cash flows) to the vehicle that will manage the
settlement process have been discounted over the expected period of contributions. The contributions are expected to be
settled by cash flows from the group's South African operations and will occur over a number of years.

The assumptions that were made in the determination of the provision amount include: silicosis prevalence rates; estimated
settlement per claimant; benefit take-up rates and disease progression rates.

A discount rate of 8% was used, based on government bonds with similar terms to the obligation.

27 PROVISION FOR PENSION AND POST-RETIREMENT BENEFITS

US dollar millions

2017

2016

2015

Defined benefit plans

The group has made provision for pension, provident and medical
schemes covering substantially all employees. The retirement schemes
consist of the following:

AngloGold Ashanti Limited Pension Fund

(18)

Post-retirement medical scheme for AngloGold Ashanti Limited South
African employees

114

109

Other defined benefit plans

Sub-total

122

118

Transferred to other non-current assets

- AngloGold Ashanti Limited Pension Fund

122

118

107

Other defined benefit plans include the following:

- Obuasi Mines Staff Pension Scheme

- Retiree Medical Plan for North American employees

- Supplemental Employee Retirement Plan (SERP) for North America

(USA) Inc. employees

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

US dollar millions

2017

2016

2015

27 PROVISION FOR PENSION AND POST-RETIREMENT BENEFITS

CONTINUED

Post-retirement medical scheme for AngloGold Ashanti Limited
South African employees

The provision for post-retirement medical funding represents the
provision for health care benefits for employees and retired employees
and their registered dependants.

The post-retirement benefit costs are assessed in accordance with the
advice of independent professionally qualified actuaries. The actuarial
method used is the projected unit credit funding method. This scheme is
unfunded. The last valuation was performed as at 31 December 2017.

Information with respect to the defined benefit liability is as follows:

Benefit obligation

Balance at beginning of year

109

135

Interest cost

Benefits paid

(9)

(8)

(9)

Actuarial (gain) loss

(8)

(2)

(7)

Translation

(32)

Balance at end of year

115

109

Less: transfer to non-current assets and liabilities held for sale

(1)

(1)

Net amount recognised

(1)

114

109

Components of net periodic benefit cost

Interest cost

Net periodic benefit cost

Assumptions

Assumptions used to determine benefit obligations at the end of the
year are as follows:

Discount rate

9.29%

9.31%

10.10%

Expected increase in health care costs

7.75%

8.30%

9.10%

Assumed health care cost trend rates at 31 December:

Health care cost trend assumed for next year

7.75%

8.30%

9.10%

Rate to which the cost trend is assumed to decline (the ultimate trend
rate)

7.75%

8.30%

9.10%

Assumed health care cost trend rates have a significant effect on the
amounts reported for health care plans. A 1% point change in assumed
health care cost trend rates would have the following effect:

Effect on total service and interest cost - 1% point increase

Effect on post-retirement benefit obligation - 1% point increase

Effect on total service and interest cost - 1% point decrease

(1)

(1)

Effect on post-retirement benefit obligation 1% point decrease

(8)

(9)

(8)

(1)

The obligation for post-retirement medical is unfunded.

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

US dollar millions

2017

2016

2015

27 PROVISION FOR PENSION AND POST-RETIREMENT BENEFITS

CONTINUED

Post-retirement medical scheme for AngloGold Ashanti Limited
South African employees CONTINUED

Cash flows

Contributions

AngloGold Ashanti Limited expects to contribute $10m to the post-
retirement medical plan in 2018.

Estimated future benefit payments

The following medical benefit payments, which reflect the expected
future service, as appropriate, are expected to be paid:

2018

2019

2020

2021

2022

Thereafter

28 DEFERRED TAXATION

Deferred taxation relating to temporary differences is made up as
follows:

Liabilities

Tangible assets

604

730

743

Inventories

Other

652

771

792

Assets

Provisions

229

245

242

Tax losses

Other

293

279

Net deferred taxation liability

359

492

513

Included in the statement of financial position as follows:

Deferred tax assets

Deferred tax liabilities

363

496

514

Net deferred taxation liability

359

492

513

The movement on the deferred tax balance is as follows:

Balance at beginning of year

492

513

440

Taxation of items included in income statement

(68)

(45)

140

Taxation on items included in other comprehensive income

(6)

Transfer to non-current assets and liabilities held for sale

(73)

Translation

(69)

Balance at end of year

359

492

513

Provision has been made for South African income tax or foreign taxes that may result from future remittances of
undistributed earnings of foreign subsidiaries or foreign corporate joint ventures, where the group is able to assert that the
undistributed earnings are not permanently reinvested. In all other cases, the foreign subsidiaries reinvest the undistributed
earnings into future capital expansion projects, maintenance capital and ongoing working capital funding requirements.

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

Unrecognised taxable temporary differences pertaining to undistributed earnings totalled $384m (2016: $366m;
2015: $357m).

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

US dollar millions

2017

2016

2015

29 TRADE, OTHER PAYABLES AND DEFERRED INCOME

Non-current

Current

Trade payables

358

381

306

Accruals and deferred income

193

206

187

Short-term provisions

Accruals for retrenchment costs

Other payables

638

615

516

Total trade, other payables and deferred income

641

619

521

Current trade and other payables are non-interest bearing and are
normally settled within 60 days.

30 TAXATION

Balance at beginning of year

Refunds during the year

Payments during the year

(174)

(165)

(184)

Taxation of items included in the income statement

190

234

192

Offset of VAT and other taxes

(78)

(47)

Translation

(1)

(6)

Balance at end of year

Included in the statement of financial position as follows:

Taxation asset included in trade, other receivables and other assets

(3)

(14)

(27)

Taxation liability

111

31 CASH GENERATED FROM OPERATIONS

Profit (loss) before taxation

(63)

269

257

Adjusted for:

Movement on non-hedge derivatives and other commodity contracts

(10)

(19)

Amortisation of tangible assets (note 4)

817

789

737

Finance costs and unwinding of obligations (note 7)

169

180

245

Environmental, rehabilitation and other expenditure

(30)

(13)

(56)

Special items

394

Amortisation of intangible assets (notes 4 and 15)

Fair value adjustment on issued bonds

(9)

(66)

Interest received (note 3)

(15)

(22)

(28)

Share of associates and joint ventures' (profit) loss (note 8)

(22)

(11)

(88)

Exchange loss on foreign currency reserve release

Other non-cash movements

Movements in working capital

(156)

(76)

1,151

1,302

1,250

Movements in working capital:

(Increase) decrease in inventories

(67)

(48)

(Increase) decrease in trade, other receivables and other assets

(86)

(131)

108

Increase (decrease) in trade, other payables and deferred income

(3)

103

(118)

(156)

(76)

GROUP

– NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

US dollar millions

2017

2016

2015

32 RELATED PARTIES

Material related party transactions were as follows
(not attributable):

Sales and services rendered to related parties

Joint ventures

Purchases and services acquired from related parties

Associates

Joint ventures

Outstanding balances arising from sale of goods and services due
by related parties

Associates

Joint ventures

Amounts owed to/due by related parties above are unsecured and non-
interest bearing.

Loans advanced to associates

Rand Refinery (Pty) Limited

During the year the loan was converted to preference shares. There are no
fixed repayment terms. The loan had accrued interest at JIBAR plus 3.5%.

Loans advanced to joint ventures

Loans advanced to associates and joint ventures are included in the
carrying value of investments in associates and joint ventures (note 17).

Executive contracts

All members of the Executive Committee have permanent employment contracts which entitle them to standard group

benefits as defined by their specific region and participation in the company’s short-term incentive scheme, the Bonus Share

Plan (BSP), and the Long Term Incentive Plan (LTIP). All recently updated Executive Committee contracts include details on
participation in the Co-Investment Plan (CIP).

South African executives have an off-shore retainer which is detailed under a separate contract. This reflects the percentage
of their time focused on offshore business requirements. The offshore pay has been increased to a maximum cap of 40% of
base pay due to a review of the amount of time spent outside South Africa on the offshore responsibilities of each executive
team member. Where practical the offshore portion is now pensionable.

The executive contracts are reviewed annually and currently continue to include a change of control provision. The change of
control is subject to the following triggers:

●

The acquisition of all or part of AngloGold Ashanti; or

●

A number of shareholders holding less than 35% of the company’s issued share capital consorting to gain a majority of

the board and make management decisions; and

●

The contracts of Executive Committee members are either terminated or their role and employment conditions are
curtailed.

In the event of a change of control becoming effective, the executive will in certain circumstances be subject to both the notice
period and the change of control contract terms. The notice period applied per category of executive and the change of
control periods as at 31 December 2017 were as follows:

Executive Committee member

Notice Period Change of control

CEO

12 months

CFO

6 months

EXCO

6 months

GROUP – NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

32 RELATED PARTIES CONTINUED

Directors and other key management personnel

Executive Directors’ and Prescribed Officers’ remuneration

Salary

(1)

Performance

related

payments

(2)

Pension

scheme

benefits

Other benefits

and encashed

leave

(3)

Sub total

Pre-tax gain

on share

options

Total

2016

Total

2015

Total

Figures in thousands

2017

Rands

Dollars

(4)

Dollars

(4)

Dollars

(4)

Executive Directors

S Venkatakrishnan

13,318

8,382

3,296

3,388

28,384

2,134

1,832

1,905

KC Ramon

8,423

4,607

727

1,627

15,384

1,157

947

1,024

21,741

12,989

4,023

5,015

43,768

3,291

2,779

2,929

Prescribed Officers

CE Carter

(5)

9,408

4,411

1,330

1,717

16,866

8,238

25,104

1,887

1,535

1,906

GJ Ehm

8,778

4,116

306

1,489

14,689

4,588

19,277

1,449

1,693

1,404

L Eybers

(6)

7,400

3,691

327

2,570

13,988

1,051

DC Noko

6,767

3,173

644

1,888

12,472

938

961

976

ME Sanz Perez

6,737

3,159

795

1,078

11,769

885

1,640

823

CB Sheppard

7,154

3,354

681

272

11,461

862

721

511

TR Sibisi

5,786

2,886

703

9,452

711

541

Retired prescribed officers

8,189

2,887

22,601

33,677

29,281

62,958

4,733

5,978

4,719

60,219

24,790

7,673

31,692

124,374

42,107

166,481

12,516

13,069

10,339

Total Executive Directors' and
Prescribed Officers'
remuneration ZAR

81,960

37,779

11,696

36,707

168,142

42,107

210,249

Total Executive Directors' and
Prescribed Officers'
remuneration USD

6,162

2,840

879

2,760

12,641

3,166

15,807

15,848

13,268

(1)

Salaries are disclosed only for the period from or to which office is held, and include car allowances where applicable.

(2)

The performance related payments are calculated on the year's financial results.

(3)

Includes health care, pension allowance, cash in lieu of dividends, vested CIP match awards, group personal accident, disability and funeral cover. Surplus leave days

accrued are automatically encashed unless work requirements allow for carry over.

(4)

Values have been converted using the average annual exchange rate for 2017: R13.3014:$1; (2016: R14.6812:$1; 2015: R12.7719:$1).

(5)

Benefits for 2017 for CE Carter include a dependent's scholarship award of $2,500.

(6)

L Eybers was appointed prescribed officer with effect from 22 February 2017.

GROUP – NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

32 RELATED PARTIES CONTINUED

Directors and other key management personnel CONTINUED

Number of options and awards granted

Balance at

1 January 2017

Granted

during

2017

Exercised

during

2017

Lapsed

during

2017

Balance as at

31 December

2017

(1)

Vested balance

at 31 December

2017

Executive Directors

S Venkatakrishnan

689,087

72,118

89,553

671,652

343,678

KC Ramon

211,785

42,878

37,099

217,564

44,887

Total Executive Directors

900,872

114,996

126,652

889,216

388,565

Prescribed Officers

CE Carter

250,386

38,600

58,260

51,426

179,300

GJ Ehm

331,354

33,580

31,172

59,637

274,125

105,508

L Eybers

58,563

18,101

11,179

65,485

17,280

DC Noko

244,592

27,626

40,299

231,919

100,410

ME Sanz Perez

205,213

29,398

42,538

192,073

59,244

CB Sheppard

27,552

29,205

56,757

5,076

TR Sibisi

23,621

Retired prescribed officer

475,616

214,256

261,360

Total Prescribed Officers

1,593,276

200,131

303,688

466,439

1,023,280

287,518

Other

6,139,505

1,611,422

1,527,167

1,138,367

5,085,393

1,735,705

Total share incentive scheme

8,633,653

1,926,549

1,830,855

1,731,458

6,997,889

2,411,788

(1)

The latest expiry date of all options/awards granted and outstanding at 31 December 2017 is 1 March 2027 (2016: 1 March 2026; 2015: 3 March 2025).

Subsequent to year end and up to 16 March 2018, options/awards exercised by Executive Directors and Prescribed Officers,
are for Charles Carter who exercised 87,852 awards for a pre-tax gain of $723,854 and Graham Ehm who exercised
46,316 awards for a pre-tax gain of $392,431.

Awards granted since 2005 have been granted at no cost to participants.

Non-Executive Directors are not eligible to participate in the share incentive scheme.

Number of CSLTIP awards granted:

Balance at

1 January

2017

Granted

during

2017

Exercised

during

2017

Lapsed

during

2017

Balance as at

31 December

2017

Executive Directors

S Venkatakrishnan

120,000

174,872

294,872

KC Ramon

120,000

110,595

230,595

Total Executive Directors

240,000

285,467

525,467

Prescribed Officers

CE Carter

120,000

110,595

230,595

GJ Ehm

120,000

110,595

230,595

L Eybers

20,000

97,535

117,535

DC Noko

120,000

88,850

208,850

ME Sanz Perez

120,000

88,463

208,463

CB Sheppard

120,000

93,928

213,928

TR Sibisi

120,000

75,971

195,971

Retired prescribed officer

120,000

17,497

102,503

Total Prescribed Officer

860,000

665,937

17,497

102,503

1,405,937

Other

1,364,630

1,621,033

42,355

405,094

2,538,214

Total share incentive scheme

2,464,630

2,572,437

59,852

507,597

4,469,618

GROUP – NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December

ANNUAL FINANCIAL STATEMENTS

2017

32 RELATED PARTIES CONTINUED

Awards granted in respect of the previous year’s financial results:

Total

(1)

Total

2017

2016

Executive Directors

S Venkatakrishnan

72,118

49,962

KC Ramon

42,878

30,323